Reliance Jio Q1 profit surges 12% to ₹5,445 cr

India's largest telecom operator Reliance Jio Infocomm has reported a net profit of ₹5,445 crore for the April-June quarter of FY2024-25, a growth of 12% compared to ₹4,863 crore profit in the year-ago period.

The telecom arm of Reliance Industries Ltd reported 10% year-on-year growth in its Q1 FY25 revenue at ₹26,478 crore against ₹24,042 crore revenue in the corresponding quarter last year.

Sequentially, Reliance Jio's Q1 FY25 profit surged 2% as compared to ₹5,337 crore net profit in the previous quarter (Q4 FY24). The revenue increased 2% as compared to ₹25,959 crore revenue in the January-March quarter of FY2023-24.

The company's expenses stood at ₹19,266 crore in Q1 FY25 against ₹18,917 crore in the previous quarter and ₹17,594 crore in the year-ago period. Reliance Jio is yet to release the data on average revenue per user (ARPU) for the first quarter of the fiscal year.

The company's net profit had jumped 13% year-on-year to ₹5,337 crore for the quarter ended March 31, 2024. The telecom operator's revenue had risen 11% year-on-year to ₹25,959 crore in the fourth quarter. The ARPU was ₹181.7, with a better subscriber mix partially offset by an increasing mix of promotional 5G traffic, offered unlimited to subscribers and not yet charged separately.

As per the latest TRAI data, Reliance Jio added 2.19 million new mobile customers in May, bringing their total to 474.6 million.

Notably, Reliance Jio had raised mobile data tariffs by up to 25% from July 3.

Global brokerage Jefferies in its latest report had said that Reliance Jio leading the way in the recent tariff hikes unlike in the past, while keeping feature phone tariffs unchanged, shows a focus on monetisation and subscriber market share gains. These moves, it said, create a case for Jio’s possible public listing in 2025.

“RIL could look to IPO or spin-off Jio, as it did with Jio Financial Services (JFS),” the note said, adding that Jio could list at a $112 billion valuation. The decision to spin off or IPO Jio hinges on balancing the upside potential of full value unlocking in the spin-off with the lower controlling stake, said Jefferies.

“With the Indian market imputing 20-50% Holdco discount to listed subsidiaries, controlling owner's less than majority stake in JFS at the time of spin-off and strong performance of RIL and JFS stock post spin-off lead us to believe Jio could be spun off."

Through the IPO route, with a 33.7% minority shareholding in Jio, RIL could fulfil the IPO requirement by listing 10% of Jio, it added.