Reliance Jio Q3 Results Review - A Typical No-Tariff-Hike Quarter; SUC Saving Aids Ebitda: ICICI Securities
RJio's Q3 revenue was up inline with our estimates, while ARPU rose due to higher addition of fibre-to-the-home subscribers.
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ICICI Securities Report
Reliance Jio Infocomm’s Q3 FY23 revenue was up 2.1% QoQ to Rs 230 billion inline with our estimates, while average revenue per user rose 0.6% QoQ to Rs 178 due to higher addition of fibre-to-the-home subscribers. Sub growth decelerated to 1.2% QoQ (5.3 million net add); nonetheless, it was better than that of peers.
This was a typical no-tariff hike quarter where other parameters remained steady but relatively small to drive meaningful revenue growth. Ebitda grew by a strong 4.5% QoQ / 26.2% YoY to Rs 120 billion benefiting from lower spectrum usage charge cost. License fees and SUC cost declined 8.7% QoQ and constituted only 9.2% of revenue.
Network cost inflation was moderated at 0.6% QoQ / 15.8% YoY and we believe it was due to 5G cost capitalisation pending complete rollout.
Depreciation increased 6.3% QoQ / 34.8% YoY on rise in data network utilisation. Net profit grew 2.7% QoQ / 28.3% YoY to Rs 46 billion. RJio has rolled out 5G in 134 cities using more than 25,000 sites and more than150 radio, which implies significantly fast-paced deployment. We have cut our Ebitda estimates.
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