Reliance Jio's strong position in 4G/5G combined with Vodafone Idea Ltd.'s payout, implies consistent tariff hikes for the industry, benefiting both Jio and Bharti Airtel.
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Dolat Capital Report
Reliance Jio Infocomm Ltd.'s Q3 FY25 results were marginally below our estimates. Revenue/ Ebitda/adjusted profit after tax grew +15.5/16.6/24.3% YoY and 3.4/2.9/ 3.9% QoQ driven by tariff hike in early July 2024.
The company gained 3.3 million subscribers following the completion of SIM consolidation post tariff hike. However, a persistent high capex remains a concern.
Jio's strong position in 4G/5G combined with Vodafone Idea Ltd.'s payout, implies consistent tariff hikes for the industry, benefiting both Jio and Bharti Airtel.
We have reduced Jio's APAT by 2-4% to factor in lower subbase/average revenue per user and higher opex. Key triggers for the future are-
flowthrough of tariff hike,
5G pickup,
lower capex/robust free cash flow and,
a potential public listing.
Our revised enterprise/equity value for Jio (per share of RIL) is Rs 750/640 @ 11 times H1 FY27E EV/E (earlier Rs 690/570). Not rated.
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