Motilal Oswal Financial Services has initiated a 'Buy' rating on the recently listed Jio Platforms, setting a target price of ₹1,515. The firm points to a 3% sequential revenue increase and strong profit efficiency in the telecom segment as key drivers. Investors are watching how the company manages its limited free float and competitive telecom pressures.
Jio Platforms has received a 'Buy' rating from Motilal Oswal Financial Services, which has assigned a target price of ₹1,515 for the stock. This comes shortly after the company's debut on the Indian stock exchanges on October 28, 2026. The stock was listed at ₹1,358, marking a premium over its IPO price of ₹1,119. Analysts are evaluating the company’s performance following its first quarterly report since going public.
Operational Performance in Q2
For the second quarter of the 2027 fiscal year, the company reported a 3% increase in revenue compared to the previous quarter, and an 11% rise compared to the same period last year. This growth was supported by adding approximately 9 million new subscribers and a 1.5% increase in the average revenue per user, often referred to as ARPU. The digital services segment also showed steady growth, rising 4% sequentially and 16% year-over-year.
Efficiency Gains in Telecom
A major point of interest for the brokerage was the operational efficiency within the Reliance Jio telecom segment. The company reported an 88% incremental margin, which means that a very high portion of new revenue is being converted into profit. This performance significantly exceeded previous estimates, which had anticipated an incremental margin closer to 57%. This strong operational efficiency is a primary reason for the bullish outlook from the brokerage, which expects these trends to support the company’s push toward better free cash flow.
Investor Context and Risks
While the brokerage remains positive, investors should be aware of specific structural and market risks. Reliance Industries Limited remains the controlling shareholder, holding approximately 66.43% of the company. A significant risk factor for the stock is its limited free float, which is less than 3%. A low free float means that fewer shares are available for the general public to trade, which can lead to higher volatility in the stock price as even small buying or selling volumes can cause larger price swings.
Beyond the stock structure, the company operates in a highly competitive telecom and digital services sector. Success depends on the ability to continue growing subscribers, maintaining or increasing ARPU, and executing the expansion of digital services. Additionally, the regulatory environment in India’s telecom sector remains a monitorable factor that could impact business operations. The final success of the company’s strategy will depend on whether it can maintain these high incremental margins while navigating intense market competition.