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Dolat Capital Report
Reliance Jio's Q2 FY25 results were marginally below estimates. Revenue/Ebitda/adjusted profit after tax grew by +14.51/16.1/23.2% YoY and 7/8 /14.4% QoQ driven by tariff increase in early July 2024. Negative sub adds after nine quarters and persistent high capex are key negatives.
Jio's lead in 4G/5G combined with Vodafone Idea Ltd.'s payout, implies consistent tariff hikes for the industry, benefiting Jio more than peers.
We have reduced Jio's adjusted profit after tax by 7-9% to factor lower sub base and higher opex.
Key triggers are-
flow-through of tariff hike,
5G pickup,
lower capex/robust free cash flow and
potential listing of Jio.
Our enterprise/equity value for Jio is unchanged at Rs 1,382/1,140 at 11 times H1 FY27E EV/Ebitda (earlier Rs 1,465/1,235). Not rated.
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