While Credit Suisse has marked RIL (Reliance) as an underperforming stock, it is interesting to note that the Credit Suissey has put the enterprise valuation of Jio at $43Bn.
Credit Suisse values Jio at an enterprise value of $43 bn.
Jio’s capital employed per user is estimated at $105 (excluding capitalised expenses). Jio’s Ebitda per user has to double from $9.2 to be accretive on cost of capital. Tariff normalisation with industry peers is likely by FY25, if Jio increases prices.Currently Jio’s plans are at a 25% discount to peers.
Given the pressure on Reliance to increase Jio’s pricing, expect Airtel and others to breathe a sigh of relief in the coming days?
