Jio Platforms’ Q1 PAT rises 2.3% QoQ with a flat growth in ARPU

• Jio’s revenue from operations grew at 2.5% sequentially and 11.3% year on year.
• It added 9.2 million subscribers during the quarter and its ARPU grew 1.7% sequentially.
• Operating revenue growth was driven by subscriber gains in connectivity business and scale-up of digital services, the company said.

Reliance Jio Platforms reported a 2.28% sequential growth in consolidated net profit for the first quarter of FY24 to ₹5,098 crore as compared to ₹4,984 crore in the fourth quarter of FY23. Its revenue from operations also grew at 2.5% from the last quarter to ₹26,115 crore from ₹25,465 crore, as it added 9.2 million subscribers. Most analysts had expected it to add around 7-8 million subscribers.

The operating revenue growth was driven by subscriber gains in connectivity business and scale-up of digital services, the company said in a release.

“Jio’s wide range of quality offerings at affordable price points has enabled strong growth in subscriber base, which reflects in the financial performance of the digital services business,” said Mukesh D Ambani, CMD of Reliance Industries.

On a year on year basis, its revenues grew 11.3%, while its net profit grew 12.5%. Its EBIDTA grew 2.6% sequentially to ₹13,116 crore, and 14.8% YoY.

“Flattish ARPU QoQ at ₹180, 8 million subscriber net adds in telecom and flattish EBITDA margins. Overall,a sombre quarter, with 14% YoY EBITDA and 9% revenue growth,” said an earnings preview by Morgan Stanley.

The telecom major’s average revenue per user (ARPU) grew 1.7% sequentially to ₹180.5. Its total expenses grew 2.5% sequentially and 9% year-on-year.

Jio’s operating income rose 0.55% sequentially to ₹12,278 crore. Operating income was also impacted due to higher expenses incurred during the quarter. Total expenses rose to ₹17,594 crore from ₹16,136 crore a year ago.

“Sustained subscriber growth across mobility and wireline services led to revenue and EBITDA growth for the connectivity business. In addition, growth in digital services platform with newer services like Managed Video Broadcast and Cloud solutions, drives JPL consolidated revenue growth,” the company said.


Source: Company release

During the quarter, Jio has introduced a 4G feature phone Jio Bharat at ₹999 to gain subscribers at the lower end of the market.

JioBharat platform is ready to scale up with a successful initial trial of 1 million devices, the company said.

It’s expected to gain a substantial market share in the replacement market. Every year, as many as 60-65 million feature phones are replaced.

“Five years ago, when the JioPhone was launched, it cornered a 33% shipment market share. Assuming a similar market share, Jio Bharat could see 20-22 million devices being adopted by 2G users every year. Given that the implied ARPU of the current plans is ₹112, Jio could see a potential 3% accretion to its FY25 revenue/EBIDTA, due to this move,” said a report by Jefferies.