Reliance stock takes a hit as CLSA says Bharti Airtel doing better than Jio in revenue share gain

Shares of Reliance Industries (RIL) closed lower on Tuesday after CLSA said that the company's sequential revenue market share (RMS) gains were lower than those of Bharti Airtel's in the fourth quarter of the financial year 2022.

Revenue Market Share or RMS is the percentage of revenue of a firm to the total revenues of all telcos.

CLSA, analysing the latest Telecom Regulatory Authority of India (Trai) data, said that Bharti Airtel and Jio Infocomm saw sequential revenue market share gains in the March quarter due to the hike in tariff prices announced by the telcos in November and December last year.

Bharti Airtel's RMS gain was the highest at 71 basis points (bps), taking it to 35.5 percent while Jio’s RMS gain was 37 bps, CLSA said. One basis point is one-hundredth of a percentage point.

However, Jio's RMS still remains highest among telecom operators at 40.3 percent.

While the Reliance Industries stock closed 1.33 percent lower at Rs 2,627 per share on the BSE, the Bharti Airtel stock closed 1.63 percent higher at Rs 682 per share.

Beleaguered telecom company Vodafone Idea's RMS was at around 18 percent, said CLSA. The stock closed 1.03 percent higher at Rs 8.80 per share on the BSE.

"The market share shift away from Vi continued in FY22, with the telco losing 2.4 percentage points (ppts) on-year of RMS to 18.2%, while Jio’s revenue share was up 1.6 ppt on-year to around 40%, and Airtel’s up 2.5 ppts on–year to 35% in FY22," CLSA said.

Reliance Jio had announced a 20 percent hike in its prepaid tariffs beginning December 1, 2021. Whereas, Bharti Airtel and Vi (Vodafone Idea) had increased prepaid tariffs by 20-25 percent.

While CLSA has a positive view on RIL, its top pick in the space is Bharti Airtel.

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“RJio tariff aggression, which was earlier aimed at gaining market share, has shifted as the leader has been raising tariffs successively with intervals to incumbents,” the brokerage house said.

“Bharti and VIdea entry tariffs at a mere 9 percent premium to Jio Phone will likely limit subscriber churn,” it added.