Jio Platforms’ market capitalisation could potentially double to ₹20 lakh crore over the next four to five years, driven by a sharp increase in earnings, according to Deven Choksey, Managing Director of DRChoksey Finserv.
“Well, I think it’s very easy to say that, frankly, because I think when the size of the company doubles,” Choksey said, explaining his outlook for the company’s earnings growth. “₹10 lakh crore market cap on IPO, ₹20 lakh crore market cap four to five years down the line, distinctly possible,” he added.
He believes the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) could rise from around ₹75,000-76,000 crore to ₹1.5 lakh crore, supporting a significant increase in its valuation.
Choksey also believes Jio Platforms’ listing could mark the beginning of a new phase for Indian capital markets, with more large companies coming to the stock market and attracting bigger investors. With a jump of over 21% at listing, Jio Platforms became India’s largest telco by market capitalisation.
However, even before the IPO, the company had the biggest market share in the telecom space with over 524 million subscribers. Piyush Pandey, Senior Vice President at Centrum India, expects telecom companies to deliver revenue growth of around 12% over the next three to five years, alongside margin improvement. He sees earnings per share growth of around 15-16%, supported by periodic tariff increases of 10-12% every two to two-and-a-half years.
Pandey said the next tariff increase could come by February-March, providing a potential near-term trigger for earnings. Since telecom companies have relatively low variable costs, much of the additional revenue from higher tariffs can flow through to operating profit. A ₹10 tariff increase could add around ₹7-8 to EBITDA, he said.
However, Jio Platforms’ valuation will also depend on how investors assess its technology opportunities beyond telecom. Choksey described Jio primarily as a platform that delivers digital applications to mobile users, households and enterprises, distinguishing it from Reliance’s separate data centre and computing businesses.
Dipan Mehta, Director of Elixir Equities, said the Reliance Group’s ability to sustain growth across generations has been a key strength. He expects Jio Platforms to evolve beyond telecom into a broader consumer-facing technology company over the next four to five years, with opportunities in artificial intelligence (AI), robotics, autonomous driving and data centers.
“Growth is a way of life,” Mehta said, describing the approach that has driven the Reliance Group. He believes Jio’s digital infrastructure could help it benefit from emerging technologies, although he cautioned that rapid technological change makes long-term forecasts difficult.
Pandey said Jio offers investors a more focused exposure to telecom and consumer technology than Reliance Industries, which operates across multiple sectors. He expects the holding company discount on RIL to narrow from around 30% to 20%, though he believes it will remain.
Disclosure: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust that controls Network18, the parent company of CNBCTV18.com.
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