JM Financial expects steady ARPU growth for telcos in Q3; Jio, Airtel lead

Indian telecom operators are expected to report moderate quarter-on-quarter (Q-o-Q) average revenue per user (ARPU) growth of 0.4–1 per cent in the December 2025 quarter (Q3FY26), aided by continued customer upgrades. However, subscriber additions are likely to remain strong for Reliance Jio and Bharti Airtel, while Vodafone Idea (VIL) is expected to continue losing users, analysts at JM Financial said.

 

JM Financial has maintained its ‘Buy’ rating on Bharti Airtel, Bharti Hexacom and Tata Communications, with target prices of ₹2,460, ₹2,195 and ₹2,250, respectively, and reiterated a positive view on Reliance Jio. The brokerage cited expectations of around 12 per cent compound annual growth in industry ARPU over FY25–28.

 

 

The brokerage expects telecom operators’ Ebitda to grow at a 14–18 per cent CAGR over the same period, supported by tariff hikes, premiumisation and potential long-term benefits from 5G monetisation and fixed wireless access. It maintained an ‘Add’ rating on Vodafone Idea, raising its target price to ₹12.5, and reiterated a ‘Reduce’ rating on Indus Towers, while raising its target price to ₹400, citing duopoly risks.

 

According to analysts, Reliance Jio’s revenue and earnings before interest, tax, depreciation, and amortisation (Ebitda) are likely to grow 2.1 per cent and 2.6 per cent Q-o-Q, respectively, supported by net subscriber additions of about 8.4 million. Jio’s ARPU is expected to improve marginally by 0.4 per cent Q-o-Q to around ₹212.  ALSO READ | InCred Equities starts coverage on Tata Motors with 'Add' as CV cycle turns 

Bharti Airtel is expected to post 1.7 per cent Q-o-Q growth in India wireless revenue and 2.1 per cent growth in Ebitda, driven by net subscriber additions of around 3.3 million. The company's ARPU is likely to increase 1 per cent sequentially to ₹259, led by healthy upgrades, the brokerage said in its note.

 

Bharti Hexacom’s wireless Ebitda is projected to increase 1.8 per cent Q-o-Q, supported by mobile broadband additions and a 0.8 per cent rise in ARPU to ₹253.

 

However, Vodafone Idea’s revenue and Ebitda are expected to remain flat, as a net subscriber loss of about 3.5 million offsets a 1.1 per cent Q-o-Q increase in ARPU to ₹169, according to JM Financial.

 

According to analysts, Indus Towers' adjusted Ebitda is expected to grow 1.4 per cent Q-o-Q, supported by healthy tenancy additions driven by Vodafone Idea’s network expansion and Bharti Airtel’s rural rollouts. Net tenancy additions are estimated at around 5,200 in Q3FY26, compared with around 4,500 in the previous quarter.  ALSO READ | JM Financial initiates Adani Power, sees upside on rising power demand 

However, the company’s revenue is likely to remain flat at ₹81.7 billion, as average revenue per tower is expected to decline 0.5 per cent Q-o-Q following a one-off reconciliation income in Q2FY26. Its reported Ebitda is projected to fall 3 per cent Q-o-Q to ₹44.8 billion due to a high base, while adjusted Ebitda is expected to increase sequentially, aided by seasonal moderation in energy-related costs, JM Financial said.

 

Further, the brokerage expects Tata Communications (TCOM) to report 1.6 per cent Q-o-Q growth in revenue and a 1.8 per cent rise in Ebitda in Q3FY26, led by its digital portfolio. This is likely to be partly offset by continued weakness in core connectivity, impacted by cable cuts and challenges in recovering dues from some SAARC-region clients.  (Disclaimer: The views and investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)