Reliance Jio, Bharti Airtel's returns on investment set to double in 4 years
Bharti Airtel and Reliance Jio are expected to post their highest-ever return on capital invested this fiscal as the country's top telecom firms complete 95% pan-India 5G rollouts and focus on improving returns, according to analysts.
Macquarie Research estimates Airtel's ROCE (return on capital employed) to surge to 10-19% during FY25-28 from 2-6% in the last more than a decade, aided by tariff hikes, better subscriber mix and capex moderation. Airtel had invested $32 billion in FY24, generating a return of 8%. Over the next four years, while investments will drop to $28 billion per year, returns will likely more than double to 19%, Macquarie data showed.
«From its lows in FY19, Airtel's India mobile ARPU (average revenue per user) has improved to ₹209 in 4QFY24 (2x in five years),» the company said in an investor update. Macquarie expects Airtel's India ARPU to reach ₹275 per month in FY27, driven by a likely 15% rise in industry tariffs post the general elections this week, followed by ongoing mix improvements — data users, upgrades to 5G, strategic segmentation, and prepaid to postpaid conversions.
For Jio, the returns so far have been around 6-7%, which are likely to improve to 11-12% despite substantially higher deployments, said Aditya Suresh, head of research at Macquarie India. Jio had invested $50 billion in FY24, fetching a return of 6%. The telco is expected to sustain the capex momentum, investing nearly $51 billion each year until FY28 with returns improving to 11%, Macquarie data showed.
«Jio's
