TLKM The Stock Is Down 37% From Its Two-Year Peak - The Business Isn't

Profit Fell 10%, and the Stock Fell Much Further

Q2 2024 continues the trend flagged in Q1's post: net income attributable to owners fell 9.9% YoY to Rp5,708 billion, with the Enterprise segment swinging back to a loss (-Rp170 billion, -3.0% margin) after Q1's thin profit, and a genuine cost pressure showing up in the books - personnel expenses grew 21% year-to-date on a Rp1,241 billion early-retirement program charge disclosed in the footnotes, a real, itemized cost rather than an unexplained line (see Beyond the Usual). Revenue still grew (+2.5% YoY to Rp75,292 billion on a half-year basis), and normalized EBITDA margin held roughly flat at 51.9%, per Telkom's own framing.

But the number that matters most this quarter isn't in the income statement. Telkom's shares fell as low as Rp2,900 in May 2024 - a two-year low, and a 37.2% decline from the Rp4,620 peak this dataset flagged back in Q1 2022's post, before recovering slightly to close the quarter at Rp3,130. This is a genuinely large peak-to-trough move, and it's happened while net income has stayed positive and roughly stable (down modestly, not collapsing) across every quarter this dataset has tracked since. The stock's two-year trailing return is now -21.8%, the worst reading in this dataset's TLKM coverage, on a business that's grown revenue in every single quarter tracked since 2020.

The Prescription

Telkom should directly address, in its next earnings call or investor letter, why the market has repriced the stock so much more severely than the operating results justify - whether that's Indonesia-specific capital outflows, a sector-wide telecom derating, rising global rates pressuring a historically yield-oriented stock, or something company-specific this dataset hasn't yet identified. A gap this wide between a stable earnings profile and a 37% price decline deserves explicit management commentary, not silence. Separately, Telkom should disclose the Rp1,241 billion early-retirement program's expected headcount reduction and forward cost savings - a charge this large should come with a stated payback rationale, not just a line item.

Key Financial Metrics

Q2 2024 (three months ended Jun 30, 2024) vs Q2 2023, consolidated

FX: approximately Rp16,375 = US$1 (Jun 28, 2024 market rate), used only to convert the USD columns below.

Metric	Q2 2024 (Rp)	Q2 2024 (US$)	Q2 2023 (Rp)	YoY (Rp)	YoY (US$)
Revenue	Rp37,863B	~$2,312.1M	Rp37,388B	➖ +1.3%	➖ +1.3%
Adjusted EBITDA»	~Rp19,700B	~$1,203.1M	~Rp19,417B	➖ +1.5%	➖ +1.5%
Operating Income»	Rp10,627B	~$649.0M	Rp11,588B	⚠️ -8.3%	⚠️ -8.3%
Net Income (attributable to owners)	Rp5,708B	~$348.6M	Rp6,332B	⚠️ -9.9%	⚠️ -9.9%
Free Cash Flow» (OCF - capex)	Rp6,398B	~$390.7M	Rp6,122B	➖ +4.5%	➖ +4.5%
Total Cash	Rp25,458B	~$1,554.8M	Rp40,521B	🔴 -37.2%	🔴 -37.2%

Total cash fell sharply YoY, largely reflecting continued debt repayments and dividend timing rather than operating weakness - free cash flow itself actually grew modestly. The operating-income and net-income declines trace to the combination of the early-retirement charge (see Beyond the Usual) and a -Rp454 billion GoTo mark-to-market loss this quarter (following Q1's -Rp403 billion, see that post) - two identifiable, disclosed items rather than an unexplained operating deterioration.

Net income fell 10% on two identifiable items - an early-retirement charge and a GoTo markdown - not a broad operating breakdown. The stock, meanwhile, fell 37% from its two-year peak. See The Stock's Two-Year Drawdown and Target Valuation Range for what that gap might mean.

Key Operational Metrics

• Telkomsel revenue: Rp57.2 trillion for H1 2024, with subscriber base growing to 159.9 million and ARPU sustained
• Fixed-mobile convergence: "further improved" per management's framing, continuing the integration since IndiHome's transfer to Telkomsel (see Q2 2023's post)
• Capital expenditure: Rp7,459 billion this quarter (Rp6,834B property/equipment + Rp625B intangibles), down from Rp7,121 billion a year earlier

Segment Comparison

Q2 2024 vs Q2 2023

Segment	External Revenue Q2 2024	External Revenue Q2 2023	YoY	Segment Result Q2 2024	Margin Q2 2024	Margin Q2 2023
Mobile	Rp21,173B	Rp21,534B	➖ -1.7%	Rp6,963B	➖ 32.9%	35.1%
Consumer (IndiHome)	Rp6,116B	Rp6,627B	⚠️ -7.7%	Rp2,076B	✅ 33.9%	29.5%
Enterprise	Rp5,689B	Rp4,777B	✅ +19.1%	🔴 -Rp170B	🔴 -3.0%	1.5%
WIB	Rp4,467B	Rp4,116B	➖ +8.5%	Rp2,128B	🔴 47.6%	54.9%
Others	Rp248B	Rp100B	✅ +148.0%	-Rp376B	n/m	n/m
Total segment	Rp37,693B	Rp37,154B	➖ +1.5%	Rp10,621B	28.2%	31.1%

Consumer's revenue decline (-7.7%) partly reflects the IndiHome B2B reclassification flagged in Q1's post rather than a pure organic decline - the comparability caveat from that post still applies. Enterprise's revenue grew fastest (+19.1%) even as it swung to a loss, the same disconnect between growth and profitability this segment has shown repeatedly across this dataset's coverage.

Mobile

Margin fell again (35.1% to 32.9%), continuing the multi-quarter pressure flagged since mid-2023 with no clear reversal yet.

Consumer (IndiHome)

Margin improved to 33.9% from 29.5% even as reported revenue fell - a genuinely stronger underlying result than the headline revenue number suggests, though the B2B reclassification from Q1 makes a clean YoY read difficult (see that post).

Enterprise

Swung back to a loss (-Rp170 billion, -3.0% margin) despite the fastest revenue growth of any segment (+19.1%) - the same growth-without-profitability pattern flagged across nearly every quarter of this segment's coverage in this dataset, now spanning five straight quarters of alternating profit and loss since Q1 2023.

WIB (Wholesale and International Business)

Margin fell sharply (54.9% to 47.6%), the segment's weakest margin reading in this dataset's tracking history, despite revenue growth (+8.5%) - a genuine deterioration worth watching into Q3.

Beyond the Usual

A Rp1.2 Trillion Early-Retirement Charge Explains Most of This Half's Personnel Cost Jump

Personnel expenses grew 20.9% YoY on a half-year basis (Rp7,844 billion to Rp9,485 billion), and the footnote breakdown shows exactly why: a Rp1,241 billion early-retirement program charge this half, against zero in the same period last year. Salaries and other ongoing benefits grew far more modestly (Rp4,999 billion to Rp5,279 billion, +5.6%), meaning the one-off charge - not an underlying wage cost blowout - is responsible for the bulk of the increase. This is exactly the kind of disclosed, itemized cost this dataset's Beyond the Usual check is designed to surface: a real cost pressure, clearly explained in the footnotes rather than left as an unexplained line.

The Stock's Two-Year Drawdown

Telkom's shares closed Q2 2024 at Rp3,130, down 9.8% from Q1's Rp3,470 close (see that post) - the fourth straight quarter of decline. More strikingly, the stock touched an intraquarter low of Rp2,900 in May 2024, a level not seen anywhere else in this dataset's TLKM price history, and 37.2% below the Rp4,620 peak reached in April 2022 (see Q1 2022's post). Over the trailing 2 years (June 2022 through June 2024), the stock moved from Rp4,000 to Rp3,130, a 21.8% decline - the worst trailing-2-year reading in this dataset's coverage of the stock so far.

This drawdown has unfolded almost entirely without a matching decline in the underlying business: net income attributable to owners has stayed positive in every quarter since the peak, including this one, and revenue has grown YoY in every single quarter this dataset has tracked. The filings themselves offer no direct explanation - no disclosed company-specific crisis, litigation, or operational breakdown large enough to explain a 37% price move. The more plausible reading, though not something the filings confirm directly, is a combination of broader emerging-market and Indonesian-equity capital flows, a global derating of yield-oriented telecom stocks amid rising rates over this period, and possibly lingering caution from the GoTo-related earnings volatility this dataset tracked heavily through 2022-2023 - but this is inference from price action, not a disclosed fact, and should be read as such.

Target Valuation Range

Bottom line: meaningfully undervalued - roughly Rp3,050-Rp4,100 fair-value range (bear-to-bull, TTM EV/EBITDA-based) against a Rp3,130 actual close, sitting near the bear end after a two-year drawdown this dataset's own numbers don't fully explain.

Market cap → enterprise value	Q2 2024 (period-end)
Share price (period-end)	Rp3,130
Shares outstanding	99,062,216,600
Market capitalization	~Rp310,065 billion (~$18.9 billion)
Plus: total debt	Rp56,609 billion
Less: cash	Rp25,458 billion
Enterprise value	~Rp341,216 billion

Peer-multiple sanity check	Q1 2024	Q2 2024	Change
TTM EPS	~Rp244.15	~Rp237.84	➖ down slightly
P/E	~14.2x	~13.2x	✅ down
Book value per share (owners)	~Rp1,432.6	~Rp1,314.0	🔴 down
P/B	~2.42x	~2.38x	➖ down slightly
TTM Adjusted EBITDA	~Rp78,017B	~Rp78,300B	➖ flat
EV/EBITDA (TTM)	~4.8x	~4.4x	✅ down

EV/EBITDA has now compressed from ~5.3x at FY2023's close to ~4.4x this quarter - a genuine two-quarter re-rating, not noise, and now sitting below this dataset's typical bear-case assumption for a mature telecom. Applying the same range used throughout this dataset:

Scenario	Key assumption	Multiple	Implied EV	Implied price
Current (Q2 2024 close)	actual market price, for reference	~4.4x TTM Adjusted EBITDA	~Rp341,216 billion	Rp3,130
Bear	The de-rating reflects a genuine, sustained structural repricing of the stock that persists	~4.0x	~Rp313,200 billion	~Rp3,051
Base	The multiple stabilizes near current depressed levels pending clarity on what's actually driving the drawdown	~4.4x	~Rp344,520 billion	~Rp3,163
Bull	The market recognizes the disconnect between stable earnings and the price decline, reverting toward this dataset's more typical ~5.3x-5.8x range	~5.8x	~Rp454,140 billion	~Rp4,100

The current close sits essentially at the bear case - a multiple this compressed, against a business that's kept growing revenue and staying profitable every quarter, is the most striking valuation gap this dataset has recorded for TLKM. Whether this represents a genuine buying opportunity or the market pricing in a real risk not yet visible in the filings is the open question heading into Q3.

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