Reliance Shares On The Rise After Jio Hikes Tariff

Shares of Reliance Industries were rising on Friday after Jio Telecom hiked tariff prices across its telecom plans. Brokerages reiterated their bullish stance on the Mukesh Ambani-led conglomerate following the announcement.

What Happened: Jio announced tariff hikes for all its plans starting from July 3, 2024. Unlimited 5G plans will be available for all plans offering 2GB per day and higher going forward. The average hike across plans is 20%. 

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Brokerage Views: Jefferies maintained its "buy" call with a target price of ₹3,580, implying an upside of 16.95%.

The research firm expects Jio to deliver revenue and profit compound annual growth rate of between 18% and 26% over FY24-27, respectively. Jefferies has tweaked Reliance's FY25-26 EBITDA by 0-1% to factor in Jio's numbers. 

Morgan Stanley also maintained its "overweight" stance with a target price of ₹3,046. According to them, the company's tariff hikes are in line with its base case expectations.

The monetisation of investments remains in play for the company, the brokerage said. The start of new energy cashflow streams by end of 2024 will be the next catalyst to watch, it noted. The research firm does not expect any further rate hikes till FY27, but another 20% rate hike next year can raise earnings by 10% to 15%, it estimated. 

Price Action: Shares of Reliance Industries were up by 1.90% to ₹3,119.15 on Friday morning.

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