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Here's what brokerages have to say about Reliance Jio’s tariff hike

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The new rates will come into effect from 6 December. While the tariffs have been hiked by up to 40%, customers will now get 300% more benefits, the company said in the statement.

Here's what brokerages have to say about Reliance Jio’s tariff hike
Reliance Jio Infocomm Ltd, the wholly-owned subsidiary of Reliance Industries, on Wednesday revealed the new tariffs of its ‘All-in-One’ plans with unlimited voice and data services. The new tariffs range from Rs 199 a month to Rs 2,199 for one year. The new rates will come into effect from December 6.
While the tariffs have been hiked by up to 40 percent, customers will now get 300 percent more benefits, the company said in the statement.
Global brokerages CLSA and Goldman Sachs raised their target price on the stock while maintaining their bullish stance in the wake of the tariff hikes.
Goldman Sachs also reiterated ‘buy’ rating on Reliance Industries and raised the target price (TP) to Rs 1,850 from Rs 1,635 per share.
Meanwhile, CLSA maintained ‘buy’ rating and raised target to Rs 2,010 from Rs 1,710 per share earlier. The brokerage also raised its earnings per share (EPS) estimate by 1-8 percent.
CLSA believes that the tariff hike will boost its earnings before interest, taxes, depreciation, and amortization (Ebitda) by $1.1-1.3 billion and sees a good chance of further upside to Jio’s profit.
Jio’s tariffs remain at a 7-20 percent discount to its competition while average revenue per user (ARPU) may be higher as customers may prefer 28-day over 84-day plans, CLSA added.
“Strong earnings momentum due to a refining margin boost from IMO along with the benefit of tariff hikes will be a near-term positive. The closure of the fibre and Aramco deal, the start of the petcoke gasification project, launch of its ‘new commerce’ business in retail and any progress on stake sales in the digital business are other triggers,” CLSA said.
At 12:40 pm, shares of Reliance Industries were trading 0.70 percent higher at Rs 1,563.45 on the BSE.
Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.
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