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Reliance Jio Q4 results review – Steep CapEx high debt a challenge: Dolat Capital

Reliance Jio’s Q4 FY23 profit and loss was marginally better led by higher average revenue per user at Rs 179 (flat QoQ despite two days less) and stable network costs QoQ.

Selling and distribution costs inched up for fourth and depreciation and amortisation for fifth consecutive quarter. Steep capex, trivial free cash flow and high debt are key challenges from short-to medium term perspective.

In a quasi-duopoly market especially post 5G, Jio is a healthy growth story in the medium term. These shall be led by moderate subscriber growth (gains from weakest player can accelerate this significantly which is likely) and consistent rise in ARPU (8-10% compound annual growth rate).

In parallel, we expect Jio to capitalise on alternate revenue streams. Jio’s 5G strategy and pick-up would be key to monitor in near-term post hefty investments and capex. BQ Prime

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