Singtel’s 1QFY26 underlying earnings increased 14% y-o-y and is trending at 25% of MIBG and street full year estimates. Growth was led by Associates (15% y-o-y), despite Intouch exclusion. Associates contributed about 70% of group earnings.
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Within Associates, Airtel and AIS posted strong growth. While Telkomsel and Globe were weak, we see potential for a pick-up in momentum helped by the recent competitive truce in Indonesia and slight macro improvement.
Singtel's core business:
Firm Optus/NCS
Optus posted 4% y-o-y mobile revenue growth (in AUD), helped by competitive rationality and macro support, resulting in postpaid price hikes. Optus cost rationalisation is on track, resulting in 36% y-o-y EBIT growth despite higher D&A costs linked to spectrum. With postpaid pricing only taking effect from June, we see potential for Optus mobile growth to remain elevated.
Hopes of SG mobile turnaround
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NCS posted firm 4% y-o-y revenue growth with improved margins (EBIT up 22% y-o-y). New order bookings at S$732m was inline with FY25 runrate.
Digital InfraCo revenues fell slightly but we think the underlying growth momentum within data center business is firm. We expect data center momentum to firm further with the upcoming completion of new large data centers in Singapore and Thailand.
Singtel's associates:
Airtel and AIS led boost.
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Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
