Antique Stock Broking has published a bullish report on the potential Jio Platforms IPO, forecasting a 17% upside from its initial valuation. The report highlights potential sector-wide tariff hikes and the migration of users to higher-value plans as key drivers for growth.
Antique Stock Broking has released a report on the potential listing of Jio Platforms, suggesting a 17% upside from its initial valuation. The brokerage firm is betting on several factors to drive value for the company, including anticipated price increases for mobile services and a push to increase the average revenue collected from each user.
The brokerage views the company’s valuation, estimated at 15.6 times its earnings before interest, taxes, depreciation, and amortization, as competitive compared to peers like Bharti Airtel. A major part of the positive outlook rests on the expectation of a 15% increase in tariffs across the telecom sector. Analysts suggest that such price hikes could help the company improve its average revenue per user, or ARPU, moving toward the Rs 300 level. This would narrow the current gap in revenue per customer between Jio and its primary competitor, Bharti Airtel.
Another key focus in the report is the strategy to convert millions of users who are still on older 2G networks. With millions of 2G users yet to switch to smartphones, and a large base of budget-friendly JioBharat users, the brokerage sees potential for these customers to eventually move toward more expensive plans. This shift is viewed as a recurring source of revenue growth.
Beyond basic mobile services, the report points to the company's large network infrastructure, including its extensive fiber-optic cables and towers, as a significant advantage. The firm is also looking at the enterprise and digital services market, where adoption among small and medium-sized businesses is still relatively low. The brokerage believes that the company's own technology and patent portfolio could open up international opportunities, potentially leading to a re-evaluation of its stock value in the future.
Investors should note that brokerage reports represent independent analyst views and are not guarantees of future performance. The telecom sector in India is highly capital-intensive, requiring constant investment in new technology like 5G, which can pressure margins. Additionally, the success of these growth plans depends on several external factors, including regulatory policies, the actual pace of consumer adoption of higher-value plans, and competitive pressure. The actual benefit to investors will depend on the final IPO pricing, which may differ from current brokerage estimates, and the company's ability to execute its digital service strategy while managing the costs of network expansion.