ISAT - Cost efficiency cushions weak revenue

KBVS Update
Friday, 1 August 2025

ISAT - Cost efficiency cushions weak revenue
(Reiterate BUY - TP: IDR2,500)

1H25 revenue down 3.1% yoy amid subscriber decline. ISAT’s 1H25 revenue declined 3.1% yoy to IDR27.1 tn, mainly due to a 5.5% drop in data-revenue from lower subscribers. On a qoq basis, 2Q25 revenue was flat, but EBITDA rose 0.4% to IDR6.4 tn on better cost-efficiency, lifting margin to 47.6%.

Muted revenue revision; EBITDA margins improve on efficiency gains. Revenue forecast for ‘25F was slightly trimmed by 0.8% to IDR57.3 tn (+2.6% yoy). Operational synergies are expected to keep cash-cost growth minimal (+0.8% yoy), supporting an improved EBITDA margin of 48.1% and 4.6% EBITDA growth. Net profit is forecast to grow 4.1% to IDR5.1 tn, with a slightly higher net margin of 8.9%, despite a minor 2.1% downgrade from the prior estimate.

Reiterate BUY with TP of IDR2,500, based on 3.2x ‘25F EV/EBITDA, or within 5yrs avg. historical mean.

Regards,
Steven Gunawan - KBVS Research