Reliance Jio beats estimates, Q2 profit up 11.3% at Rs 6.8 billion

Operating revenue jumped 14% sequentially to Rs 92.4 billion, from Rs 81 billion in April-June

RIL’s telecom arm, Jio Infocomm, beat most estimates by reporting net profit of Rs 6.8 billion for the September quarter, up 11.3 per cent sequentially. In the corresponding quarter last year, it had posted a loss of Rs 2.7 billion. Average revenue per user (Arpu) fell a 2 per cent to Rs 131.7 from the earlier quarter, on the back on JioPhone expansion. Jio beat all subscriber addition estimates — it added 37 million users, to 252.3 million. In the June quarter, the addition was 28.7 million.

Operating revenue jumped 14 per cent sequentially to Rs 92.4 billion, from Rs 81 billion in April-June. The rise over a year was 50.3 per cent. Earnings before interest, tax, depreciation and amortisation (Ebitda) was Rs 35.7 billion, up 14 per cent quarterly and 147 per cent over the year. Operating margin fell by 12 basis points over the previous quarter. 

Telecom analysts estimate Jio will report revenue growth of 10-13 per cent this year on a sequential basis, coupled with nominal Arpu decline of two to three per cent.  

Anshuman Thakur, head of strategy and  planning at Jio, said: "Arpu has come off slightly due to the massive expansion we've seen due to the Rs 99 'Monsoon Hungama' offer and expansion into more tier-3, tier-4 places." Mostly the former, he added. Thakur also said: "We have received positive responses from all over the country on the registration for the Jio Gigafibre service, currently still on free trial run in a number of places."

Monthly data consumption per user rose to 11 GB, compared to 10.6 GB  and 9.6 GB over the previous two. 

Other telecom companies are yet to report their numbers for the September quarter.