Mumbai, Dec 6 (IANS): Brokerage firm Nomura has increased the target price for Reliance Industries (RIL) to Rs 2,020 from Rs 1,785.

The increase in target price comes largely on the back of assumption that the average revenue per user (ARPU) of Reliance Jio would increase post the recent tariff hike.

Target price indicates the forecast for the share price with a 12-month time horizon, partly reflecting the analyst's estimates for the company's earnings.

"Our ARPU assumption for Jio increases by 8 per cent for FY20 and 21 per cent for FY2021-22. Driven by our new Jio estimates, our consolidated earnings estimates rise by 4 per cent in FY20 and 10-12 per cent in FY21-22. Our SOTP (sum-of-the-parts valuation-based TP (target price) increases to Rs 2,020 (from Rs 1,785)," a note by Nomura said.

At 10.23 a.m., shares of RIL on the BSE were trading at Rs 1,560 per share, higher by Rs 9.70 or 0.63 per cent from its previous close. Nomura said that the increase in Jio's ARPU would be gradual.

"Compared to Rs 120 in 2Q (July-September), we expect Jio's ARPU to increase to Rs 132 in 3Q and Rs 146 in 4Q. Compared to on average Rs 132 in FY20, we expect Jio's ARPU to rise to Rs 155 in FY'21 and further rise to Rs 170 in FY22."