Reliance Jio Gets a Valuation Cut from Analysts: Report

Reported by Tanuja K April 28th, 2025 at 11:19 am

It is worth noting that there's an uptick in revenues expected in the coming two quarters for Jio. This is because many users who had already recharged with long-term annual plans before the tariff hikes would now recharge with the higher tariffs for the first time.

Highlights

Reliance Jio, India's largest telecom operator, has received a valuation cut from the analysts.
This is because of the lower revenue flow through post tariff hikes than expected.
Jio's revenue increase post tariff hikes is estimated to peak at 13% while for Airtel, it is 17%.

reliance jio gets a valuation cut from

Reliance Jio, India's largest telecom operator, has received a valuation cut from the analysts. This is because of the lower revenue flow through post tariff hikes than expected. Jio's revenue increase post tariff hikes is estimated to peak at 13% while for Airtel, it is 17%. Jio's underperformance (in expectations) has reduced its valuation from $117 billion to $111 billion. Reliance Industries Limited (RIL) has been looking to list Jio in the stock exchanges for some time. The work is going in the background to do that. However, there's no clear timeline from RIL on when they will list Jio in the public markets.

IIFL Securities, in a note said, "We cut Jio’s Ebitda estimates for FY26/27 by 3%/6% due to sustained increase in sales & distribution (S&D) costs and lower flow-through from the next tariff hike, assumed in late-2025. Consequently, we cut Jio’s EV from $117 billion to $111 billion." According to an ET report, the analyst added, "After factoring in any future flow-through, Jio’s benefit may be 13% versus Bharti’s 17%."

It is worth noting that there's an uptick in revenues expected in the coming two quarters for Jio. This is because many users who had already recharged with long-term annual plans before the tariff hikes would now recharge with the higher tariffs for the first time. Reliance Jio's net profit soared to Rs 7,022 crore for Q4 FY25. While Jio has a larger subscriber base, the telco has a lower average revenue per user (ARPU) than Airtel. The telco's EBITDA (earnings before interest, tax, depreciation, and amortisation) remains unchanged.

At the same time, Jio's 5G subscriber base continues to grow. The company is also expanding the reach of its FWA (Fixed Wireless Access) business throughout India.

ICICI Securities said, "Jio’s 5G subs base has surpassed 191 million, and the company also sees its FTTH (fibre-to-the-home) user base potentially growing to 100 million, driven by strong demand for its 5G-based fixed wireless access (FWA) services and content bundling."