Reliance Industries - Jio Announces Tariff Hikes: Prabhudas Lilladher

Prabhudas Lilladher Report

Reliance Jio, has announced a significant tariff hike of 13-25% across its various plans, set to take effect from July 03, 2024. This marks the first major increase in tariffs since December 2021 and reflects Jio's commitment to enhancing its 4G and 5G network and maintaining sustainable service quality.

Factoring this hike in, we anticipate an average revenue per user of Rs 213/230 for FY25/26E. Valuing the company at 15 times enterprise /Ebitda we arrive at target price of Rs 1042 for Jio (earlier target price of Rs 967).

We estimate a 4% change in consol EPS for FY25/26E. On a consolidated basis, given weak refining and petchem outlook in Q1 FY25 for Reliance’s O2C segment, we continue to maintain our Hold rating with a target price of Rs 3031 (earlier Rs 2955) valuing the standalone segment at 7.5 times FY26 enterprise / Ebitda, Retail at 39 times FY26 EV/Ebitda and Jio at 15x FY26 EV/Ebitda.

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