1. India’s most valued company returned 72% in 2017; CLSA says buy RIL in 2018 too

India’s most valued company returned 72% in 2017; CLSA says buy RIL in 2018 too

India’s most valued company by market capitalization, shares of Reliance Industries returned more than 72% last year. CLSA's new target price implies an upside of more than 17% from the current market prices.

By: | Published: January 3, 2018 10:14 AM
Ambani to unveil RIL future, Ambani RIL future launch, Reliance Group stadium, reliance family day celebration, RIL group show CLSA has maintained a buy call on the shares of Reliance Industries, with a target price of Rs 1,080. (Image: Reuters)

India’s most valued company by market capitalization, shares of Reliance Industries returned more than 72% last year. Global brokerage firm CLSA is bullish on the shares and says that the year will this year will see a big cash-flow boost for the company. According to the Hong-Kong based firm, the capex will begin to fall in the current year and projects of over $40 billion will start to deliver in full swing while capital expenditure falls. Stabilisation of ROGC and petcoke gasification would boost Ebitda,” CLSA said.

CLSA has maintained a buy call on the shares of the company, with a target price of Rs 1,080. RIL shares were trading at Rs 919.65 this morning. The target price implies an upside of more than 17% from the current market prices. CLSA said Jio’s monetisation plan entails raising smartphone revenue per user and expanding 4G feature phone subs along with the launch of its broadband and enterprise offering.

In December this year, Mukesh Ambani, the Chairman of Reliance Industries said that the company is ahead of its schedule on earnings from Reliance Jio. “We are ahead of schedule on earnings from Reliance Jio, will watch out for next few quarters,” PTI reported Mukesh Ambani as saying.

Track live stock price: Reliance Industries

Earlier CLSA said that discount reduction in Jio’s smartphone average revenue per user (ARPU) will drive EBITDA further. The beginning of downstream expansion will drive doubling of EBITDA over FY17-20. CLSA states that JioPhone will drive next leg of growth for Jio after a fabulous first year. Jio has achieved 12% subscriber market share a year after its launch.

2017 was an excellent year for Reliance Industries, as the company’s market capitalisation topped a staggering Rs 6 lakh crore in October. Interestingly, in 2017 alone RIL added more than Rs 2 lakh crore to its market capitalisation. On February 27th 2017, RIL crossed the 4 lakh crore market capitalisation, and very soon rose to Rs 5 lakh crore, to trump TCS to become India’s most valued company in July last year.

Reliance Jio turned an impressive set of numbers for the July-September quarter which is otherwise seen as a weak period for mobile operators. The company, which started commercial operations from September 2016 for the first time released its full earnings and other operating metrics. As is known, Jio started charging customers for its services only from April 2017. Reliance Jio’s revenue during the quarter stood at Rs 6,147 crore, which is quite impressive considering that it has only around 138 million subscribers.

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