Reliance Jio Lists at Premium : Should You Hold or Exit?

Groww • 3 days ago

Original source

What This Video Is About

The video discusses Jio's business and its recent listing, focusing on the telecom sector as the primary driver of revenue and EBITDA. It also compares Jio's performance with Airtel, highlighting differences in subscriber share, broadband base, ARPU, and margins.

Major Ideas Discussed

  • Jio's revenue and EBITDA are primarily driven by its telecom business, accounting for 87% of revenue and 94% of EBITDA.
  • In Q1 FY27, Jio saw a 7% growth in customers, 3.3% growth in ARPU, and a 43% growth in home broadband connections.
  • Compared to Airtel, Jio has a slightly higher subscriber share and almost twice the broadband base, but Airtel has stronger ARPU and margins.
  • Post-listing, Jio is trading at 40X earnings, while Airtel is at around 39X, with notable differences in cash tax.
  • The focus for Jio post-listing will be on ARPU, broadband profitability, capital returns, and cash generation.

What to Watch Next

Investors should monitor growth in customer base and ARPU, expansion and profitability of broadband services, capital returns and cash generation efficiency, and the ability to maintain or improve margins for both Jio and Airtel to make informed decisions.