Reliance Industries continued its upward journey for the sixth day in a row, breached Rs 1,000-mark, for the first time since November 2014 to touch day’s high of Rs 1,006 and ended 1.78 per cent higher at Rs 996.50 – on improving refining margins and optimism about the launch of its 4G phone services.

Reliance Industries Chairman Mukesh Ambani during its 41st Annual General Meeting last Friday(June 12) had said that the company could be ready to begin 4G phone services in December.

The 41st annual general meeting of Reliance Industries has proved to be a major driver for Reliance Industries shares.

Here are a few reasons that analysts have given for the company’s scrip’s upward movement:
Market research firm CLSA listed the reasons for the bullish sentiments propelling the scrip. It cited the company’s plans to launch 4G services by December 2015 with a guided total investment of Rs 1 trillion.

According to analysts at Edelweiss Securities, apart from launching its 4G services, the fact that it will cover 80 per cent of India’s population by year-end and 100 per cent within three years is a major confidence booster.

The UBS Securities India said that company’s euphoria before the 4G launch can also be gauged by the fact that infrastructure such as 250,000 km of fibre optics, 0.5 msf of ‘Cloud Data’ centres operational. “All of which (infrastructure) could service in excess of 100 million wireless boradband and 20 million fibre-to-home customers,” UBS said.

DSP Merrill Lynch pointed out that the monthly data tariff of Rs 300-500 with a sub-Rs 4,000 handset can be winning combination for the 4G business.

Macquarie Capital Securities elaborated that the key licences are also in place — like the one for providing wireless and wired services. It has also received the facility-based operator licence, which allows it to lease out fibre-connectivity. “Jio has also applied for a cable multi-system operator (MSO) licence, to provide cable TV and related services over its infrastructure,” Macquarie Capital said.

Meanwhile, analysts across the board were unanimous in declaring that mobile applications (apps) that will accompany 4G services, will be one of prime sources of revenue stream.

The company has lined up apps like Jio Drive, which is a virtual drive to content store, Jio Beats and Play for video and music streaming, Jio Mags for online magazines, and Jio News for news aggregation.

It has also tied up with State Bank of India (SBI) to launch Jio Money, the digital wallet service, and last month launched its JioChat app.

Apart from telecom, the company’s retail business will also be a key economic driver, said Citi Research. Reliance Industries plans to scale up its presence from 200 cities to over 900 by next year.

The company also plans to enter e-commerce space to advance its retail sales cited Barclays Research.

“Plans to enter e-commerce helped by advanced internet infrastructure built by Reliance Jio and physical retail business built by Reliance Retail by end of the year,” said Barclays, adding that the pilot initiative in grocery segment has been a success.

Market research firm Bernstein said that the company aims to capitalise on the country’s large demographic dividend along with rising income levels.

“RIL continues to add new retail stores while is expected to roll out several e-commerce initiatives across different formats including fashion and lifestyle,” said Bernstein.

With IANS inputs