Q3 results: Reliance Jio beats estimates, net profit rises 16% at Rs 3,489 crore

Reliance Jio on Friday beat analysts estimates on most of the parameters by posting a net profit of Rs 3,489 crore, up 15.5% quarter-on-quarter, during the October-December period. Revenues during the quarter grew 5.3% at Rs 19,475 crore, while Ebitda at Rs 8,483 crore was up 6.4%. Operating margin rose 43.6% from the preceding quarter’s 43.1%. The company’s average revenue per user during the period was up 4% sequentially at Rs 151. Still, Jio’s Arpu is well behind rival Bharti Airtel’s Arpu of Rs 162 in the September quarter. Bharti is yet to report the December quarter numbers.

Due to the ongoing farmers’ agitation against the new farm laws in which the company was targeted in Punjab, the company could not check its monthly churn which was at 1.63%. Though it was lower than preceding quarter’s 1.69% when it was hit by the pandemic when migrant labourers had moved to their hometowns, it was much higher than the company’s pre-Covid numbers — it stood at 0.46% in Q1.

Another parameter where the company disappointed was net additions, which at 5.2 million sequentially remained below analyst expectations of 6-6.5 million.
Most brokerages had estimated the company’s revenues to grow 4% on sequential basis, Ebitda also by 4% and net profit by around 6%. Arpu was estimated around Rs 149.

On other operating metrics, Jio performed well but average data growth per user at 12.9 GB though higher by 7.5% than preceding quarter’s 12 GB is still far from rival Bharti Airtel’s level of 16 GB in the July-September quarter. This could be due to high proportion of JioPhone users who are essentially feature phone users who are not heavy data users.

Data traffic at 1,58,60,000 million MB was up 10% compared to the preceding quarter. Jio’s voice volume at 9,74,960 minutes registered an increase of nearly 5% against the preceding quarter. Usage per customer at 796 minutes per month registered an increase of nearly 3% sequentially.

Total customer gross addition stood at 25.1 million, which was below the gross adds of 27.2 million in the preceding quarter. The total subscriber base stood at 410.8 million, resulting in net addition of 5.2 million.

Commenting on the performance, Mukesh Ambani, chairman, Reliance Industries, said, “India is today among the leaders driving the Digital Revolution in the world. In order to maintain this lead, Jio will continue to accelerate the roll-out of its digital platforms and indigenously developed next generation 5G stack and make it affordable and available everywhere. Jio’s 5G service will be a testimony to the vision of Atmanirbhar Bharat. Jio is determined to make India 2G-mukt, thereby empowering every Indian to have an affordable smartphone and be a part of digital and data revolution. We invite and encourage all stakeholders to work together to make world-class digital services available to every Indian consumer at the most affordable prices”.