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ICICI Securities Report
Reliance Jio Infocomm's revenues grew by a strong 8% QoQ despite Q4 FY22 being shorter by two days, which shows that the latest tariff hike (in December 2021) was absorbed much better than the previous one (in Dec-19).
However, the number of subscribers continues to decline on clean-up of inactive subs and SIM consolidation.
RJio may see some more benefit of tariff hike in Q1 FY23 – of about 3-4%.
Negative surprise was in free-cash-flow generation, which was impacted from higher working capital due to rise in receivables, and capex. FY22 capex stood at Rs 257 billion (adjusted for spectrum payment), significantly higher versus our estimates.
We reckon the capex also includes opex capitalisation as the company’s fibre based businesses are yet to be fully rolled out. RJio remains confident of acceleration in fibre-to-the-home sub-base, and enterprise business.
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