Business

IIE DIGITAL DESK ; New Delhi, October 29: Jio Platforms is moving beyond its traditional identity as a telecom operator and positioning itself as a broader technology and digital services company, according to brokerage firm Dolat Capital. As the company enters a new phase following its stock market debut, its future growth could increasingly depend on monetising its extensive digital infrastructure, expanding home broadband, developing enterprise technology services and generating higher revenue from its existing customer base.

The brokerage believes Jio Platforms has reached an important stage in its business evolution. After investing heavily in network expansion and 5G infrastructure, the company is now looking to generate greater financial returns from those investments. Potential telecom tariff increases, premium mobile plans, digital services and lower capital expenditure intensity could support revenue growth and improve cash generation over the coming years.

Jio Platforms made a strong debut on the Indian stock market on October 28, with its shares listing at Rs 1,358 against the initial public offering price of Rs 1,119. The stock subsequently extended its gains, and market reports on October 29 showed it climbing to an intraday high of Rs 1,490. The sharp rally has drawn attention to the company's long-term growth prospects as well as its valuation.

Dolat Capital has initiated coverage on Jio Platforms with an 'Accumulate' rating and a target price of Rs 1,435 per share. The brokerage's assessment reflects its confidence in the company's growth opportunities while also recognising that the stock's strong listing-day performance has already priced in part of its expected improvement.

Dolat Capital estimates that Jio Platforms could achieve compound annual growth rates of approximately 13 per cent in revenue, 15 per cent in EBITDA and 21 per cent in adjusted profit after tax between FY26 and FY29. These projections are based on several potential growth drivers, including telecom tariff increases, the premiumisation of mobile services, 5G monetisation and the development of usage-based pricing models.

The stock's market performance has moved rapidly. Jio Platforms shares rose beyond the Rs 1,435 target during trading on October 29, meaning the brokerage's initial target was already below the reported intraday price. This highlights the difference between analysts' valuation estimates and the market price investors are willing to pay.

The brokerage's long-term outlook rests on the company's ability to transform its large subscriber base and technology infrastructure into sustainable earnings and stronger cash flows.

One of the most important growth opportunities for Jio Platforms is the possibility of further telecom tariff increases. Average revenue per user, commonly known as ARPU, measures the average revenue generated from each subscriber and is a key indicator of a telecom operator's financial performance.

Dolat Capital expects the telecom industry to continue increasing tariffs periodically, with the next round potentially arriving around the first quarter of FY28. The brokerage also sees scope for Jio's ARPU to approach Rs 300 as pricing improves and more customers migrate towards higher-value services.

Jio has historically focused on affordable connectivity and expanding its subscriber base. That strategy helped the company build a large customer franchise, but it also allowed Bharti Airtel to maintain a higher ARPU. Dolat Capital expects this gap to narrow as customers upgrade to smartphones, adopt premium plans and gradually move towards higher-value offerings.

The company could also benefit from differentiated pricing and possible pay-as-you-use data tariffs. Instead of relying exclusively on unlimited data packages, telecom operators may increasingly explore pricing models that reflect usage patterns and the value of additional services.

Nevertheless, the timing and scale of future tariff increases remain uncertain. Delayed price revisions, competitive pressure and concerns about customer affordability could affect the pace of revenue growth.

Beyond mobile services, home broadband represents another important opportunity for Jio Platforms. Its broadband offerings, including JioFiber and JioAirFiber, allow the company to expand its presence in households and provide connectivity to customers who require reliable high-speed internet.

India's relatively low household broadband penetration leaves considerable room for expansion. Jio can use its existing network infrastructure and distribution capabilities to reach more homes, including locations where conventional fibre installation may be difficult.

Home broadband also creates opportunities to offer bundled services, including entertainment, cloud storage and other digital products. Such packages can increase customer engagement and potentially generate more revenue from each household.

The opportunity extends beyond consumer connectivity. As more businesses adopt cloud computing, connected devices and digital infrastructure, Jio Platforms could increase its presence in enterprise technology services. These offerings may include cloud solutions, managed connectivity, private 5G networks, cybersecurity and Internet of Things services.

By expanding in these areas, Jio could reduce its dependence on traditional mobile connectivity revenue and develop additional sources of growth.

Dolat Capital has identified digital services as another potential contributor to Jio Platforms' next phase of expansion. Products such as Jio Cloud and JioPC could help the company develop a wider ecosystem of consumer and business services.

The strategy is to use connectivity as the foundation for a broader range of digital offerings. As customers become more familiar with cloud-based services, connected devices and AI-powered applications, Jio could explore new ways to monetise its technology platforms.

Enterprise services could be particularly important because businesses often require integrated technology solutions rather than standalone connectivity. Jio's network infrastructure may provide a foundation for services covering communications, cloud computing, connected devices and managed technology systems.

International partnerships could offer another route to expansion. Rather than building complete telecom networks in every overseas market, Jio could potentially commercialise its proprietary technologies and provide solutions to international operators through partnership-based arrangements.

These opportunities remain dependent on execution, customer adoption and the company's ability to develop commercially sustainable services.

Another important element of Dolat Capital's assessment is the possibility that Jio Platforms has moved beyond the most intensive phase of its network investment cycle. The company has spent heavily on expanding its 4G and 5G infrastructure, building digital capabilities and strengthening its technology platform.

As these investments mature, capital expenditure may grow more slowly than revenue and operating earnings. If that happens, Jio could generate stronger free cash flow, giving it greater financial flexibility to invest in new businesses and improve returns.

The brokerage believes that the monetisation of existing infrastructure will become increasingly important as the company enters its next growth phase. However, continued spending will still be required to expand network capacity, upgrade technology and meet rising data demand.

The key question is whether Jio can generate sufficient additional revenue from its existing infrastructure to justify the substantial investments already made.

Despite its growth opportunities, Jio Platforms faces several risks that investors will need to monitor. Delays in telecom tariff increases could affect revenue projections, while additional capital expenditure and operating costs could limit improvements in profitability.

The stock's sharp post-listing rally has also increased the importance of valuation. Even a company with strong long-term prospects can face volatility if its share price rises faster than its earnings expectations.

Dolat Capital has highlighted the possibility of delayed tariff increases and potential share supply from pre-IPO investors as risks to its investment outlook. Investors will also need to track subscriber growth, ARPU, broadband additions, digital service monetisation and free cash flow in the coming quarters.

The brokerage's target price is an estimate based on its assumptions and valuation methodology, not a guarantee of future returns.

Jio Platforms' next stage of development could mark a shift from subscriber-led expansion towards greater monetisation of its existing customer base and digital infrastructure. Mobile connectivity remains central to the business, but broadband, enterprise technology, cloud services and international partnerships could increasingly contribute to its growth.

Dolat Capital's assessment suggests that the company has opportunities to expand earnings while improving the returns generated by its network investments. The success of this strategy will depend on whether Jio can sustain customer growth, implement pricing changes, scale its digital businesses and maintain financial discipline.

For investors, the focus will increasingly move beyond subscriber numbers towards revenue per user, operating margins, cash generation and the contribution of newer digital services.

Jio Platforms has the scale and infrastructure to pursue a broader role in India's digital economy. The challenge now is to convert that reach into sustainable growth and long-term financial returns.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Brokerage ratings and price targets are estimates and do not guarantee future stock performance.