Centrum values Reliance Jio at $120 bn, says this on Bharti Airtel, VIL competition

Centrum brokerage has valued Reliance Jio Platforms at approximately $120 billion, positioning it as one of the largest digital infrastructure and services firms globally. This valuation follows Jio's impressive technological advancements and strategic market positioning within India's telecom sector.

Jio's subscriber base stands at 49.8 crore, nearing the 50 crore mark, with a significant portion being 5G users. The company's leadership in new technologies is underscored by its 21 crore 5G users and over 2 crore home broadband connections, Centrum said. JioAirFiber has connected 74 lakh homes, achieving global recognition in fixed wireless access.

The brokerage noted Reliance Jio has shown consistent strength with revenue growth of 16.6 per cent year-on-year to Rs 30,880 crore in Q1FY26. EBITDA rose by 19.9 per cent year-on-year to Rs 16,690 crore, with a margin of 54 per cent. The company's profit after tax increased by 23.3 per cent year-on-year, indicating robust operational efficiency despite higher finance costs.

Centrum said that the average revenue per user (ARPU) is a key growth driver for Jio, which increased to Rs 208.8 in Q1FY26, up 14.9 per cent year-on-year. This growth was facilitated by a tariff hike in July 2024, a richer subscriber mix, and an increase in bundled service uptake. Such regular tariff adjustments are anticipated to provide a steady revenue increase as a staple industry feature.

Jio's broader ecosystem includes digital and media assets such as JioCinema, JioTV, JioSaavn, JioCloud, and JioMeet. These platforms enhance consumer engagement and reduce churn. On the enterprise side, JioAICloud offers opportunities in artificial intelligence and computing, expanding Jio's business profile.

Jio's growth is expected to benefit from ongoing tariff hikes, rising 5G adoption, and a growing home broadband market. Subscriber additions are likely to continue steadily, driven by the increasing penetration of smartphones and 5G devices. This environment supports expectations for sustained double-digit revenue and EBITDA growth, Centrum said.

The brokerage said that the completion of major 5G investments is likely to enhance operating leverage, maintaining margins within the 53-55 per cent range. Stronger free cash flow generation is anticipated to support balance sheet stability, offering flexibility for future investments.

Competitors in the Indian telecom sector, such as Bharti Airtel and Vodafone Idea (VIL), along with state-owned BSNL/MTNL, have faced similar challenges in a consolidated market, the brokerage said. Reliance Jio's strategic initiatives and infrastructural investments have enabled it to maintain a competitive edge.

The valuation of Reliance Jio utilises a sum-of-the-parts framework, assigning an 11x EV/EBITDA for Jio Infocomm and a 5x EV/Net Sales multiple for digital services, Centrum said. This comprehensive approach reflects the company's scale, stable cash flows, and synergies within its ecosystem, reinforcing its market leadership.

Centrum brokerage highlighted that as Reliance Jio continues to grow, its strategic focus on ARPU, technological advancements, and market expansion will likely drive its performance, ensuring it remains a dominant player in the global digital infrastructure landscape.