CGSI projects Singtel's FY3/26F revenue to grow 2% YoY, whilst StarHub's revenue is expected to rise 4% in 2025F.

Major telcos Singtel and StarHub are expected to achieve low single-digit revenue growth in 2025F, with a more positive earnings outlook as double-digit growth is projected for the year.

In a report, CGS International (CGSI) projected Singtel's FY3/26F revenue to grow by approximately 2% year-on-year, marking a reversal after five consecutive years of decline (FY20-24).

Similarly, CGSI forecasted StarHub's revenue to grow by around 4% YoY in 2025F, driven primarily by robust growth in its Managed Services and Cybersecurity segments.

On the earnings front, CGSI expects Singtel's FY3/26F EPS to grow by approximately 17% year-on-year, supported by 7% EBIT growth from continued $200m annual operating expense cuts, NCS margin improvements, and enhanced postpaid pricing in Australia.

For StarHub, CGSI anticipates FY25F earnings growth of about 14% YoY, fueled by cost benefits from its completed Dare+ transformation program, leading to incremental EBIT margin expansion.

CGSI considers Singtel its preferred pick for 2025F, citing multiple growth drivers across its core business and associates, along with significant asset monetization opportunities.

Overall, it maintains an Overweight stance on the Telco sector, citing two main factors: strong double-digit earnings growth despite a slowing macroeconomic environment and attractive dividend yields of approximately 6-7%.