Jio Platforms shares climb over 3% after Q2 PAT rises 14% YoY to Rs 8,389 crore. Buy, sell or hold?
Jio Platforms reported a 14% year-on-year rise in September-quarter net profit in its first earnings announcement since listing. Subscriber additions, 5G adoption and digital services supported growth, while brokerages retained Buy ratings with target prices of Rs 1,340 and Rs 1,350.
Shares of newly listed Jio Platforms rallied as much as 3.1% to their day’s high of Rs 1,476 on the BSE on Monday after reporting a 14% year-on-year (YoY) increase in consolidated net profit to Rs 8,389 crore in its September quarter results, marking its first earnings announcement since its stock market debut earlier in the week. The growth was supported by healthy subscriber additions, expansion in its digital services business and a marginal rise in average revenue per user (ARPU).Revenue from operations climbed 11% YoY to Rs 40,475 crore from Rs 36,332 crore in the corresponding quarter last year.
On a sequential basis, net profit rose 8% from Rs 7,765 crore reported in the June quarter, while revenue grew 3%.EBITDA rose 17% YoY during the quarter, supported by revenue growth, operating leverage and margin improvement. The EBITDA margin expanded 250 basis points to 54.1%. ARPU also edged higher to Rs 218.8 in the second quarter, as promotional offers for fixed broadband customers offset the benefits from a better subscriber mix and higher usage.The results come after Jio Platforms' stock market debut on October 28.
Its shares listed at Rs 1,358, representing a 21.36% premium over the issue price of Rs 1,119.On the operational front, per capita data consumption stood at 44.2 GB per month, while total data traffic increased 22% YoY in the September quarter. Monthly subscriber churn remained stable at 1.6%, and the company added 9.1 million net subscribers during the quarter.Live EventsAs of the end of September, Jio's 5G subscriber base stood at 300 million, an addition of 66 million users over the past 12 months.
Customer engagement remained strong, with 5G accounting for 56% of total wireless traffic.The company's fixed broadband subscriber base reached 30 million, following additions of 7.3 million customers over the last 12 months. Jio AirFiber had a total subscriber base of 15.1 million and accounted for more than 75% of Jio's fixed broadband additions during the same period."We warmly welcome our new shareholders to the Jio Platforms family as we enter a new era as a listed company.
This quarter’s results continue to reflect the strength of our 5G network, and the growing reach of our broadband and digital services," said Akash M Ambani, MD of Jio Platforms.He said Jio's early investments in next-generation technologies had helped establish the foundation for its success over the past decade. The company will continue to strengthen its capabilities in satellite communications, 6G intellectual property and artificial intelligence embedded in core voice and data services, he added.Buy, sell or hold Jio Platforms share?Japanese brokerage Nomura was the first to initiate coverage on Jio Platforms following its stock market listing, assigning a Buy rating with a target price of Rs 1,340 from the IPO price.
The stock has already crossed this target. Nomura said Jio's extensive 5G coverage has helped drive data consumption per subscriber to 27% above Bharti Airtel's levels.It also highlighted Jio's industry-low monthly churn rate of 1.6%, which positions the company to narrow its average revenue per user (ARPU) gap with Airtel. The brokerage summed up its assessment by saying that "the disruptor is now the leader of the industry".Nomura expects Jio Platforms to become debt-free by FY29.
The company's net debt-to-equity ratio, including deferred payment obligations, declined to 0.37 times in FY26 from 0.56 times in FY24.Domestic brokerage Motilal Oswal also has a Buy rating and a target price of Rs 1,350, describing the company as the 'Gateway to Digital India'. According to its estimates, Jio is valued at par with Bharti Airtel's India business at both the IPO price and the current market price (CMP), excluding Indus and Bharti Airtel's minority interests.Motilal Oswal believes Jio could command a premium over Bharti Airtel's India business in the near term, supported by its market leadership, greater influence over industry tariffs and a free float of less than 3%.
However, the brokerage noted that its earnings and valuation estimates remain highly sensitive to wireless ARPU growth.Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication.
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