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Informist, Monday, Jun. 23, 2025

 

By Arya S. Biju

 

MUMBAI – The March quarter earnings turned out to be a mixed bag for the telecommunications sector. While the combined net profit of the five telecommunications companies in the Nifty 200 exceeded analysts' expectations by a wide margin, net sales took a beating. 

 

The cumulative net profit, excluding exceptional items, of the five companies grew nearly 28% on quarter to INR 67.06 billion for the March quarter, while analysts had expected a contraction of over 91% to INR 11.14 billion. Including exceptional items, the aggregate net profit of the companies fell 44%, but was still better than analysts' expectation. This growth in net profit was even after total expenses rose around 7% sequentially, outpacing the 4% increase in revenue.

 

Net sales of the five companies rose a little over 4% sequentially to INR 748.33 billion, but was below the analysts' expectation of over 5% sequential growth. This was also lower than the 7% sequential growth in net sales of Nifty 200 companies. This was mainly on account of a low-single digit rise in revenues of the companies barring Bharti Airtel and a near 1?ll in revenue of Vodafone Idea that accounted for around 15% of the total revenue. 

 

Debt-laden telecom major, Vodafone Idea remained in red, skewing the aggregate net profit figures. For the latest quarter, the company's net loss widened further to INR 71.66 billion from INR 66.09 billion reported in the previous quarter, but was lower than the net loss of INR 76.75 billion reported in the year-ago quarter. 

 

Excluding Vodafone Idea the aggregate net profit of the four companies grew 17% sequentially, beating analysts' estimate of 34?ll. This is also higher than the Nifty 200 companies' adjusted net profit growth of 12% on a quarter-on-quarter basis. 

 

While all four companies excluding Vodafone Idea outperformed the 91% sequential fall in adjusted net profit estimated for the sector, only three–Bharti Airtel, Bharti Hexacom, and Tata Communications–outpaced the 3% sequential fall expected for the Nifty 200 companies. However, in terms of revenue, only Bharti Airtel met the expectation of 5% sequential growth for the sector and over 6% for the Nifty 200 companies. Except for Indus Towers and Vodafone Idea, net profit margin of all others improved both sequentially and on a year-on-year basis. 

 

On an individual basis, barring Indus Towers, all others outpaced analysts' estimates for their respective net profit, while only Indus Towers and Tata Communications met the estimates for net sales. 

 

FRONT RUNNERS

The aggregate net profit was boosted by Bharti Airtel, which accounts for more than 80% of the total net profit of the four companies excluding Vodafone Idea. The telecom major's adjusted net profit for the March quarter rose over 54% sequentially to INR 111.62 billion, while analysts had expected it to fall 61%. This was supported by a deferred tax benefit of INR 42.33 billion. During the quarter the company had a one-time cost of INR 1.40 billion on account of settlement of legal dispute in one of the group's former subsidiaries in Africa. Including this, the company's net profit for the quarter fell over 25% sequentially to INR 110.22 billion, but was still better than analysts' expectation. 

 

Bharti Airtel's net sales for the March quarter rose over 6% to INR 478.76 billion, but was below analysts' expectation of INR 486.52 billion. The revenue growth for the quarter was driven by a growth in India mobile services, rebound in constant currency revenue in Africa, and full quarter impact of Indus Towers consolidation. This was despite a sequentially flat average revenue per user impacted by two less days in the quarter. 

 

Tata Communications' adjusted net profit grew over 84% on quarter to INR 4.63 billion, beating analysts' expectation of 36% growth. The Tata group-owned company had a one-time gain of INR 5.78 billion on account of property sale. Including this gain, the company's net profit quadrupled on quarter to INR 10.40 billion. Net sales of Tata Communications rose over 3% to INR 59.90 billion in the March quarter, in line with analysts' expectation. This was mainly on the back of a 4% sequential growth in revenue from its data services segment, which contributed over 85% of the total sales. 

 

LAGGARDS

Vodafone Idea continued its loss-making journey in the March quarter, marking 28th consecutive quarter of reporting a net loss. This was mainly on the back of a weak average revenue per user and higher expenses stemming from increased finance and marketing costs. Subscriber loss continued to weigh on the company's earnings in the quarter, despite moderating to pre-tariff hike levels. The company's earnings for the quarter was further dented by a 0.9% sequential fall in net sales and an over 2% rise in total expenses. 

 

In the case of Indus Towers, a high base and increased expenses dragged the company's bottom line for the March quarter. Its net profit for the quarter saw a 56% sequential decline to INR 17.79 billion, almost in line with analysts' estimate of over 52?ll. This fall in net profit was amplified by a provision write-back of INR 30 billion during the December quarter compared to a mere INR-2.3-billion in the latest quarter. Further, its expenses for the quarter more than doubled on quarter to INR 55.75 billion, driven by higher depreciation and amortisation expenses, finance cost, and costs related to power and fuel. The telecom infrastructure provider's revenue, on the other hand, rose 2% sequentially to INR 77.27 billion, in line with analysts estimate, driven by a sharp increase in the number of towers and co-locations. However, the 2% growth was sharply lower than that of Nifty 200 companies. 

 

Bharti Hexacom's net profit for the quarter jumped nearly 80% on quarter to INR 4.68 billion, boosted by a low base in the December quarter. Adjusted to this, the company's net profit for the March quarter grew only 28% sequentially, and was lower than the 42% growth expected by the Street. Its revenue for the quarter grew nearly 2% sequentially to INR 22.89 billion, in line with estimates. But this was the slowest revenue growth since the June quarter of 2023-24 (Apr-Mar).

 

The following table shows the performance of the five companies in the telecommunications sector in the Nifty 200 index vis-a-vis the consensus estimates for each company as well as the consensus estimate for the telecommunications sector and the Nifty 200:

Company	PAT beat analysts' estimate	Adjusted QoQ PAT growth %	Adjusted QoQ PAT growth estimate %	PAT beat sector estimate	PAT beat Nifty 200 estimate		Revenue beat analysts' estimate	Revenue QoQ growth %	Revenue QoQ growth estimate %	Revenue beat sector e stimate	Revenue beat Nifty 200 estimate
Telecommunications Sector	--	27.8%	(-)91.2%	YES	--		--	4.2%	5.2%	NO	--
Nifty 200	--	11.7%	(-)3.04%	--	--		--	6.9%	6.2%	--	--
Bharti Airtel	YES	54.3%	(-)60.7%	YES	YES		NO	6.1%	7.8%	YES	NO
Bharti Hexacom	YES	79.53%	41.89%	YES	YES		NO	1.7%	2%	NO	NO
Indus Towers	NO	(-)55.6%	(-)52.4%	YES	NO		YES	2.4%	2%	NO	NO
Tata Communications	YES	84.4%	36%	YES	YES		YES	3.3%	3%	NO	NO
Vodafone Idea	N.A.	N.A.	N.A.	N.A.	N.A.		YES	(-)1.5%	(-)1.4%	NO	NO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the profit margins of the five telecom sector companies that are a part of the Nifty 200:

Company	Adj PAT Margin for Mar-25	Adj PAT Margin for Mar-24	Adj PAT Margin for Dec-24
Telecom Sector	8.95%	(-)1.11%	7.30%
Nifty 200	12.92%	12.28%	11.86%
Bharti Airtel	23.31%	12.04%	16.03%
Bharti Hexacom	20.46%	11.92%	16.29%
Indus Towers	23.02%	25.76%	53.04%
Tata Communications	7.72%	6.61%	4.33%
Vodafone Idea	N.A.	N.A.	N.A.

 

(Note: Analyst estimates for the index group is derived from estimates of companies part of the index)

 

End

 

Data compiled by Vinod Bhovad

Edited by Deepshikha Bhardwaj

 

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