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They added that Jio<\/a>’s fiscal fourth quarter revenues missed earnings estimates due to a lower-than-expected rise in average revenue per user (ARPU), while quarterly operating income (read: Ebitda) too was below estimates due to the revenue miss and higher network costs\/licence fees.
Jefferies said “Jio’s 4Q performance disappointed with revenues, Ebitda and profits, all missing estimates”. It, in fact, has cut Jio’s valuation by “8% to $81 billion” and also lowered its FY23-24 (earnings) estimates for the telecom market leader by up to 18%.
ICICI Securities, in turn, said Jio’s FY22 capex spend at Rs 28,800 crore was \"a negative surprise, which restricted its annual FCF generation to just Rs 1,022 crore from Rs 5,699 crore a year ago”.
It added that Jio’s capex outgo included Rs 3,100 crore cash spent on spectrum bought in the March 2021 auction and another Rs 1,000 crore paid to Bharti Airtel for 800 Mhz spectrum. “Even if we exclude these, Jio’s FY22 network capex (adjusted for spectrum payments) is elevated at Rs 25,700 crore.”
BNP Paribas said the 13% on-year rise in Jio's network costs in March quarter could partially be due to the rise in energy costs while depreciation & interest costs had risen by over 20% on year due to costs related to additional spectrum Jio acquired.
Jefferies said Jio had actually “turned FCF negative on high capex and cash interest cost,” adding that while the telco was “FCF positive in FY21, it had witnessed a cash-burn of Rs 11,900 crore in FY22 due to a sharp 3 times increase in cash interest costs to Rs 13,000 crore”.
It added that “a 4% on-year decline in Jio’s CFO (cash flow from operating activities) in FY22, along with a 12% on-year rise in cash capex to Rs 28,800 crore, also resulted in a 63% decline in its FCFF (free cash-flow to the firm) to Rs 2,500 crore in FY22”.