Leading investment firms MOFSL and Dolat Capital have revised their share price targets for Jio Platforms Ltd (JPL) upwards, days after initiating coverage. This comes on the heels of the telecom operator's robust September quarter financial results, which showed consistent growth across key metrics.
Analysts Boost Price Targets for Jio Platforms
MOFSL has reaffirmed its 'Buy' rating on Jio Platforms, raising its target price to Rs 1,515 from an earlier Rs 1,350. The firm highlighted Jio's in-line revenue growth and strong operational performance. Similarly, Dolat Capital Markets maintained its 'Accumulate' rating, increasing its target to Rs 1,450 from Rs 1,435. Jio Platforms shares closed at Rs 1,431.30 on Friday, reflecting investor interest in the digital services giant.
Strong Q2 Performance Drives Optimism
For the September quarter, Jio Platforms reported a 3% quarter-on-quarter (QoQ) revenue growth. This performance was primarily fueled by a 1.5% QoQ uptick in average revenue per user (ARPU), significant net additions of 90 lakh new subscribers, and a substantial scale-up in digital services, which grew 4% QoQ. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a healthy 5% QoQ increase, driven by an 88% incremental margin in RJio and 8% QoQ growth in reported EBITDA from digital services.
Dolat Capital noted that while EBITDA growth was robust, profit after tax growth was slightly softer in Q2 due to higher finance costs following the capitalization of assets. Despite this, Jio's management expressed strong confidence in future growth prospects, identifying Home Broadband, Enterprises, and International partnerships (with 12-15 large potential tie-ups) as key next growth engines.
Long-Term Outlook and Financial Projections
MOFSL, while acknowledging potential near-term stock price volatility due to Jio Platforms' limited free float (less than 3%), remains structurally positive on the Indian telecom sector. The firm anticipates a 15% smartphone tariff hike in the near future, which would further bolster revenue for operators like Jio.
MOFSL's analysis positions Jio Platforms as a pivotal player in 'digital India,' poised to extend its market leadership in both Wireless and Home Broadband. The scaling of its digital offerings and potential international collaborations for proprietary technologies are expected to provide significant growth and valuation upsides. The firm also noted a sharp moderation in 1HFY27 consolidated cash capex, leading to an inflection in Free Cash Flow (FCF) generation and a decline in effective net debt by Rs 20,700 crore year-on-year, bringing it to Rs 1.38 lakh crore.
MOFSL has consequently raised RJio's standalone FY27-29 reported EBITDA estimates by 2-5% and JPL's consolidated PAT by 7-11%, citing accelerated FCF generation and resulting deleveraging. They project RJio's capex to remain range-bound, enabling Jio Platforms to generate cumulative FCF of Rs 1.68 trillion over FY27-29 and achieve net cash status by FY29. MOFSL reiterated its 'BUY' rating, with the revised target of Rs 1,515 based on a DCF-backed 12.2 times FY29 reported EBITDA, driven by higher incremental EBITDA margins and faster-than-expected FCF inflection.