“ARPU numbers at Rs 150 are quite decent; there was a tariff hike of almost 20% that happened in the month of December. We are seeing a 5% kind of tariff hike in this quarter; the bulk of ARPU is yet to come. Next quarter we will see further ARPU improvement,” said Naveen Kulkarni, CIO, Axis Securities.
How do you see Jio’s performance this time around?
Jio’s performance looks quite good. ARPU came in around Rs 152 compared with Rs 144 in the last quarter, so there is a gain of Rs 7 which is marginally higher than what we were expecting. EBITDA number also looks quite strong. There is a beat on EBITDA numbers also by a couple of percentage points.
How do you see Jio’s performance this time around?
Jio’s performance looks quite good. ARPU came in around Rs 152 compared with Rs 144 in the last quarter, so there is a gain of Rs 7 which is marginally higher than what we were expecting. EBITDA number also looks quite strong. There is a beat on EBITDA numbers also by a couple of percentage points.
What are you expecting in terms of commentary on Jio Fibre, overall ARPU trajectory and what’s your take on ARPU figures that have come in?
ARPU numbers at Rs 150 are quite decent; there was a tariff hike of almost 20% that happened in the month of December. We are seeing a 5% kind of tariff hike in this quarter; the bulk of ARPU is yet to come. Next quarter we will see further ARPU improvement. This is very likely because of the tariff hike that the company has taken. ARPUs are going to trend stronger; the question is if there will be further tariff hikes by the industry or not. The commentary on that will be very very carefully watched out for apart from what future plans the company has for Jio. One needs to see if Jio is looking at other geographies because Jio has become very successful in India. We have a fairly large customer base and primarily that’s why they have become the number one wireless operator in India. What they can do more with this kind of a business model, whether they will scale it to other geographies etc will be interesting aspects that we will observe in the management commentary.
What is it that you would want to hear when it comes to the management commentary?
The subscriber numbers are slight negative no doubt but revenues have still managed to go up; EBITDA growth has been reasonably good. I do not see these aspects to be negative overall. The core operating performance looks stronger, EBITDA margin has gone up. We will have to wait and watch out for what exactly is happening on the subscriber front. That is one aspect for which we will need to need management comments to come to overall estimates for Jio for FY23.
Overall, RIL numbers are fairly strong, whether it is the retail business or the O2C business. The numbers look fairly strong to me. The stock should be looking to open positive on Monday and that is the primary reading that I am getting right now.
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