TLKM
Contact our analyst Eka
19th May 2025
BUY, 14% upside
Price Rp 2,760
Target price Rp3,150
BUY, 14% upside
Price Rp 2,760
Target price Rp3,150
Consumer Spending Softness Impacts Revenue
- Telkom Indonesia (TLKM) reported revenue of IDR 36.6 trillion in Q1 2025, reflecting a -2.1% YoY and -2.9% QoQ decline. The weakness was mainly driven by soft consumer spending during the Lebaran festive period.
- The Data, Internet & IT Services segment declined -5.4% YoY to IDR 21.3 trillion, mainly due to a -5.9% YoY drop in digital business, which contributes 90% of mobile revenue.
- Data traffic (payload) increased +19.8% YoY to 5,643 PB, but ARPU fell to IDR 42,000, from IDR 45,000 in Q1 2024, reflecting intensified competition and spending pressure.
- Mobile subscribers declined -0.5% QoQ to 158.8 million, as the company focused on product simplification and quality user retention.
- IndiHome’s consolidated revenue grew +3.4% YoY to IDR 6.66 trillion, while IndiHome B2C revenue rose +1.3% YoY.
- The subscriber base increased +10.4% YoY to 9.8 million, but ARPU declined to IDR 224,000, from IDR 243,000 in Q1 2024.
- The convergence penetration ratio moderated to 55%.
- TLKM plans to improve ARPU in H2 2025, depending on macroeconomic conditions.
- Revenue from Network & Other Telco Services increased +9.5% YoY to IDR 3.68 trillion, driven by satellite and payment solutions.
- Despite ongoing challenges from shifting consumer behavior and industry competition, TLKM maintains a conservative revenue growth target of low single digits for 2025.
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Q1 2025 Results: Margin improved QoQ, still down YoY
- TLKM posted a net profit of IDR 5.59 trillion in Q1 2025, down -4.0% YoY and -2.7% QoQ.
- Total operating expenses decreased -1% YoY to IDR 26.2 trillion.
- General and administrative expenses rose +18.8% YoY to IDR 1.8 trillion, driven by:
- A low base in Q1 2024
- Provisions related to IndiHome B2C, which began in Q3 2024
- Fewer working days in Q1 2025
- Operational, maintenance, and telecom expenses declined -0.2% YoY to IDR 9.6 trillion, reflecting ongoing efficiency improvements.
- TLKM recorded an unrealized gain of IDR 308 billion from changes in fair value of its GOTO investment.
- Net Profit Margin (NPM) in Q1 2025 was 15.9%, slightly up from 15.8% in Q4 2024, but down YoY.
- Core net income, excluding unrealized gains/losses, declined -12.3% YoY to IDR 5.59 trillion, but improved +2.3% QoQ.
- We maintain our BUY recommendation, with a revised target price of IDR 3,150, offering +14% upside based on a 12x forward P/E. While consumer spending remains soft, TLKM’s strategic realignment, digital service expansion, and operational efficiencies support a positive long-term outlook.
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