Reliance Industries’ telecom arm, Reliance Jio Infocomm Ltd, on Thursday reported a 65 percent surge in net profit, its fifth straight profitable quarter. During Q3, Reliance Jio added 28 million users for a total of 280 million.
Here are some of the highlights of the results:
- Results were inline with analysts’ estimates. Revenue growth momentum intact with a sequential growth of 12.4 percent after a 13.9 percent q-o-q growth in Q2 aided by subscriber addition.
- Margins expanded by 30 basis points to 39% vs 38.7%, while profit growth was at 22.1% to Rs 831 crore. One basis point is one-hundredth of a percentage point.
- Net subscriber addition slowed to 27.9 million in Q3 vs 37 million previous quarter. Subscriber addition was impacted by the Supreme Court verdict on Aadhaar, which affected on-boarding of new customers due to a change in eKYC process. This caused some disruption for a few weeks but the company is back to its normal rate of client addition.
- Average Revenue Per User (ARPU) continued to moderate. This quarter, ARPU declined by 1% to Rs 130 vs Rs 131.7 q-o-q due to higher traction in the JioPhone Monsoon Hungama plan at the monthly tariff of Rs 99.
- Marginal decline in data consumption per user, which fell to 10.8 GB vs 11 GB due to a government ban on some websites and few sports events. However, net data consumption continued to be strong with Jio customers consuming 8.6 billion GB data vs. 7.7 billion GB in Q2.
- Company’s plan to monetize its tower and fibre assets to reduce debt and strengthen its balance sheet. As part of its asset monetization plan, Jio proposes to transfer assets to separate companies and plans to enter into lease arrangements for long-term use of these with the tower / fibre company.
- Axis capital said that there was no commitment from the management on price increase as subscriber addition continued to be the key focus for the company despite recent change in strategy by peers.