TLKM The Stock Fell 13% in a Month - Profit Only Fell 6%

A Modest Profit Decline, a Sharp Stock Drop, and a Quiet Reclassification

Q1 2024 shows a business growing revenue while profit slipped on the now-familiar GoTo swing: revenue grew 3.7% YoY to Rp37,429 billion, but net income attributable to owners fell 5.8% to Rp6,053 billion, almost entirely traceable to Telkomsel's GoTo stake flipping from a +Rp430 billion gain in Q1 2023 (see that post) to a -Rp403 billion loss this quarter - an Rp833 billion swing against a total operating-profit decline of just Rp423 billion, meaning the underlying business excluding GoTo actually held up better than the headline suggests. Enterprise returned to a thin profit (Rp154 billion, 3.4% margin) after the loss-then-record-then-loss volatility this dataset has tracked across all of 2023.

The stock told a much rougher story than the numbers: Telkom's shares fell from Rp4,000 at the end of February to Rp3,470 by quarter-end, a 13.3% single-month drop and a 24.2% decline from Rp4,580 two years earlier at the end of Q1 2022 - a meaningfully sharper move than this quarter's modest 5.8% profit decline explains on its own (see Target Valuation Range). Separately, a footnote in this quarter's presentation discloses a reclassification worth flagging for anyone comparing Consumer segment revenue across quarters: IndiHome's enterprise (B2B) revenue was moved out of the Consumer segment and into Data, Internet & IT Services starting this quarter, meaning Consumer's reported +3.1% YoY growth understates the +6.6% growth Telkom itself says IndiHome's residential (B2C) business actually achieved on a like-for-like basis (see Beyond the Usual).

The Prescription

Telkom should restate at least one prior comparative quarter's Consumer segment figures on the new post-reclassification basis, rather than leaving readers to manually adjust using the single like-for-like data point disclosed in this quarter's presentation - a reclassification that changes segment comparability deserves a clean bridge, not a one-line footnote buried in the deck. Separately, given the stock's 13% single-month drop against a comparatively modest earnings decline, Telkom's investor relations should proactively address what specifically drove the sell-off (broader emerging-market rotation, a rate-related repricing of yield-sensitive telecom stocks, or company-specific concerns) rather than leaving the market's reaction unexplained heading into Q2.

Key Financial Metrics

Q1 2024 (three months ended Mar 31, 2024) vs Q1 2023, consolidated

FX: approximately Rp15,860 = US$1 (Mar 28, 2024 market rate), used only to convert the USD columns below.

Metric	Q1 2024 (Rp)	Q1 2024 (US$)	Q1 2023 (Rp)	YoY (Rp)	YoY (US$)
Revenue	Rp37,429B	~$2,360.0M	Rp36,090B	✅ +3.7%	✅ +3.7%
Adjusted EBITDA»	~Rp19,400B	~$1,223.2M	~Rp18,983B	➖ +2.2%	➖ +2.2%
Operating Income»	Rp11,008B	~$694.0M	Rp11,431B	⚠️ -3.7%	⚠️ -3.7%
Net Income (attributable to owners)	Rp6,053B	~$381.7M	Rp6,424B	⚠️ -5.8%	⚠️ -5.8%
Free Cash Flow» (OCF - capex)	Rp9,571B	~$603.5M	Rp3,846B	✅ +148.9%	✅ +148.9%
Total Cash	Rp29,521B	~$1,861.2M	Rp29,935B	➖ -1.4%	➖ -1.4%

Free cash flow more than doubled YoY, the standout line this quarter - operating cash flow grew to Rp15,830 billion from Rp12,377 billion while capex fell sharply to Rp6,259 billion from Rp8,531 billion (Q1 2023 had included a one-off Rp1,648 billion tower acquisition, see that post). This is a genuinely strong cash-generation quarter sitting underneath a modestly weaker reported-profit headline.

Net income fell 5.8%, almost entirely a GoTo mark-to-market swing rather than operating weakness - free cash flow actually grew sharply. The stock fell far more than the numbers justify, and a quiet segment reclassification means Consumer's growth rate isn't directly comparable to prior quarters anymore. See Beyond the Usual and Target Valuation Range.

Key Operational Metrics

• IndiHome subscribers: 8.9 million total (partly reflecting the B2B reclassification below), with IndiHome B2C revenue growing 6.6% YoY to Rp6.4 trillion on a like-for-like basis
• Telkomsel subscribers: 159.7 million, continuing growth with improved customer-base productivity and quality per management's framing
• Capital expenditure: Rp6,259 billion this quarter (Rp5,466B property/equipment + Rp793B intangibles), down sharply from Rp8,531 billion a year earlier

Segment Comparison

Q1 2024 vs Q1 2023 - Consumer segment revenue is not directly comparable to prior quarters, see Beyond the Usual

Segment	External Revenue Q1 2024	External Revenue Q1 2023	YoY	Segment Result Q1 2024	Margin Q1 2024	Margin Q1 2023
Mobile	Rp21,091B	Rp20,635B	➖ +2.2%	Rp6,360B	⚠️ 30.2%	34.9%
Consumer (IndiHome)*	Rp6,862B	Rp6,656B	➖ +3.1%	Rp2,300B	⚠️ 33.5%	36.4%
Enterprise	Rp4,472B	Rp4,507B	➖ -0.8%	Rp154B	➖ 3.4%	-3.1%
WIB	Rp4,760B	Rp4,040B	✅ +17.8%	Rp2,537B	⚠️ 53.3%	56.5%
Others	Rp126B	Rp89B	✅ +41.6%	-Rp233B	n/m	n/m
Total segment	Rp37,311B	Rp35,927B	➖ +3.9%	Rp11,118B	29.8%	32.1%

^*Consumer segment revenue growth (+3.1%) is understated by the IndiHome B2B reclassification into Data, Internet & IT Services (part of Mobile/WIB) this quarter - see Beyond the Usual. Every segment's margin fell YoY except Enterprise, which turned positive after Q1 2023's loss - a genuinely broad-based, if modest, margin compression this quarter, most likely tied to the same operating-cost pressure flagged since Q2 2023's post.

Mobile

Margin fell nearly 5 points (34.9% to 30.2%), continuing the pressure flagged since mid-2023 rather than the recovery seen through most of 2023's later quarters.

Consumer (IndiHome)

Reported revenue growth (+3.1%) understates IndiHome's actual residential performance (+6.6% YoY like-for-like) due to this quarter's B2B revenue reclassification - see Beyond the Usual for the full mechanics.

Enterprise

Returned to a thin profit (Rp154 billion, 3.4% margin) after Q1 2023's loss - a much smaller swing than the segment's Q3 2023 record (18.6%, see that post) or the Q4 2023 reversal implied in FY2023's post, continuing the segment's now well-established pattern of large quarter-to-quarter swings with no disclosed cause.

WIB (Wholesale and International Business)

Revenue grew fastest of any segment (+17.8%), the strongest growth this dataset has recorded for WIB, though margin fell 3 points (56.5% to 53.3%) alongside the broader margin compression this quarter.

Beyond the Usual

IndiHome's B2B Revenue Was Quietly Moved Out of the Consumer Segment This Quarter

Telkom's own 1Q24 presentation discloses, in a footnote easy to miss, that "IndiHome enterprise (B2B) revenue recognition" was reclassified into Data, Internet & IT Services starting this quarter - meaning the IndiHome revenue that used to sit inside the Consumer segment now partly sits elsewhere. Telkom's own materials give the one data point needed to adjust for it: IndiHome residential (B2C) revenue, stripped of the reclassified B2B piece, was Rp6.4 trillion in Q1 2023, so this quarter's Rp6.4 trillion in the same like-for-like measure represents 6.6% growth - more than double the +3.1% headline growth shown in the segment table above, which mixes reclassified and non-reclassified periods. This is exactly the kind of comparability break worth flagging explicitly: a reader tracking Consumer segment growth quarter over quarter without catching this footnote would materially misread the trend.

Target Valuation Range

Bottom line: undervalued - roughly Rp3,300-Rp4,450 fair-value range (bear-to-bull, TTM EV/EBITDA-based) against a Rp3,470 actual close, sitting near the bear end after a sharp single-month drop that outpaced this quarter's comparatively modest profit decline.

Telkom's shares closed Q1 2024 at Rp3,470, down 12.2% from FY2023's Rp3,950 close (see that post) - almost the entire move concentrated in March alone, when the stock fell from Rp4,000 to Rp3,470 (-13.3%). Over the trailing 2 years (March 2022 through March 2024), the stock moved from Rp4,580 to Rp3,470, a 24.2% decline - a genuinely poor two-year stretch for a stock whose earnings grew modestly over the same window, and a sharper single-quarter move than this quarter's own operating numbers explain on their own; the drop looks more consistent with a broader market or sector repricing than a Telkom-specific event, though the filing gives no explicit explanation.

Market cap → enterprise value	Q1 2024 (period-end)
Share price (period-end)	Rp3,470
Shares outstanding	99,062,216,600
Market capitalization	~Rp343,746 billion (~$21.7 billion)
Plus: total debt	Rp61,302 billion
Less: cash	Rp29,521 billion
Enterprise value	~Rp375,527 billion

Peer-multiple sanity check	FY2023	Q1 2024	Change
TTM EPS	Rp247.92	~Rp244.15	➖ down slightly
P/E	~15.9x	~14.2x	✅ down
Book value per share (owners)	~Rp1,370.2	~Rp1,432.6	✅ up
P/B	~2.88x	~2.42x	✅ down
TTM Adjusted EBITDA	Rp77,600B	~Rp78,017B	➖ up slightly
EV/EBITDA (TTM)	~5.3x	~4.8x	✅ down

Every multiple compressed even as the underlying fundamentals (EPS, EBITDA) held roughly flat - the entire move is the stock price falling faster than the business changed, exactly the pattern flagged above. Applying the same mature-telecom EV/EBITDA range used throughout this dataset:

Scenario	Key assumption	Multiple	Implied EV	Implied price
Current (Q1 2024 close)	actual market price, for reference	~4.8x TTM Adjusted EBITDA	~Rp375,527 billion	Rp3,470
Bear	The market's March sell-off reflects a genuine, sustained repricing rather than a temporary overreaction	~4.3x	~Rp335,473 billion	~Rp3,072
Base	The multiple partially recovers as Q2 clarifies whether the sell-off was company-specific or macro-driven	~5.3x	~Rp413,490 billion	~Rp3,832
Bull	The market corrects what looks like an overreaction, re-rating back toward FY2023's ~5.3x given flat-to-growing fundamentals	~5.8x	~Rp452,499 billion	~Rp4,271

The current close sits below even the bear case's implied price on a strict EBITDA basis, suggesting March's sell-off pushed the multiple to a genuinely compressed level relative to this dataset's typical mature-telecom range - a reasonable candidate for mean reversion if Q2 shows the operating business staying on track.

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