The latest annual general meeting (AGM) of Reliance Industries (RIL) has provided a much needed momentum to the shares of the oil & gas giant. After its chairman Mukesh Ambani announced the roll out of company’s 4G services, Reliance Jio in December 2015 during the AGM, the shares of RIL have rallied as much as R107 or 12.1%.
This is the fastest weekly gain by RIL stock in nearly six years. On Friday, the scrip closed up R17.45 or 1.8% at R996.50, a seven-month high.
The announcement of the start of R-Jio operations seem to have brought some respite to investors who were increasingly getting nervous about company’s significant investment in this non-core business over the last three years while its flagship exploration and production business continues to weigh on RIL’s financial performance. The RIL stock has underperformed the market every year since 2008.
The Street in general seems acknowledging R-Jio plans to cover 80% of India’s population by year end and 100% within three years. Also, initiatives like monthly data tariff of R300-500 and a sub-R4,000 crore handset are also seen as strategies that could boost its 4G business. Analyst are also hopeful that as RIL nears completion of a significant capex cycle, its core businesses will start adding to earnings momentum citing improving refining and petchem margins.