Here’s a way to recover some of the rise in Jio’s new tariff plan— buy RIL shares
- Jio has hiked its mobile tariff plans by as much as 35% and is set to make the Jio Phone and Jio Fiber more expensive.
- While the consumers are ruing this expected hike in mobile tariffs, investors of Reliance Industries are cheering.
- The company’s profit may go up by 8% and the share price may jump as much as 27% over the next one year.
Reliance Industries, or RIL as it is popularly known, share price jumped over 1.5% on Wednesday morning, the first trading day after Jio revealed its new tariff plans that became 35% more expensive for its users.
If you owned shares of RIL, you would be far more excited than if you were just a Jio customer. The tariff hike announced by Jio can boost the company’s earnings by as much as 8%, according to CLSA. The profit may grow further as JioPhone is expected to get costlier.
The company reported earnings per share (EPS) of about ₹55 at the end of March 2019, and a dividend of ₹6 for every share held. If your phone usage is ₹1,000 a month, you will need 2,000 shares if you consider only the dividend amount, and it remains unchanged this year.
At the current prices, it would cost you ₹32 lakh in investment. If you have that kind of capital for investment, you are probably not worried about your phone bills. This is helpful only for those frugal enough to care. But buying shares will not only save you the cost of mobile services, it can grow your capital too.
CLSA expects the share price of RIL to be ₹2,010 in the next 12 months— that’s a 25% gain from the current level. This is what you get aside from the dividend, which would have covered your cost.
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