This Dhanteras buy India’s biggest company and turn your investment into gold

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Published: October 16, 2017 3:40:29 PM

Round the nation, gold is among the best things for every household, clan or tribe to buy on this auspicious occasion. This time you can think a little different. What about buying India's biggest company?

Most Indians’ preferred asset ? gold ? has returned nearly 8% so far this year. (Image: Reuters)

India’s most awaited festival — Diwali — is just two days away. Round the nation, gold is among the best things for every household, clan or tribe to buy on this auspicious occasion. But this time, you can think a little different. Have you ever thought of owning the biggest company in India? If the answer is ‘no’ then you can shift your investment focus and can buy stocks of Reliance Industries and may gain up to 18%. Most Indians’ preferred asset — gold — has returned nearly 8%* so far this year, while key equity indices Sensex and Nifty have risen in the range of 22-24% since January.

So this time there is a chance that you can be a shareholder/owner of the oil-to-telecom conglomerate company Reliance Industries. Apart from its traditional business of refining and textile, Reliance Industries flagged off its disruptive venture — Reliance Jio last year. The oil refining major, entered the telecom sector with Jio, has disturbed the who’s who of the telecom business, including the largest telecom player — Bharti Airtel.

Shares of Reliance Industries have returned over 55% in the current calendar year so far. The research and brokerage firm Axis Direct has recommended ‘buy’ on it with an upside 18% to Rs 987 from the current market price of Rs 838. “With the launch of Reliance Jio Phone, Reliance Jio expects to add 200-230 million of the 500 million plus feature phone users in India. Reliance Jio aims to add nearly 25 million subscribers every month from the fourth quarter of the financial year 2018 led by the sale of 20 million Jio Phones and conventional subscriber addition of nearly 5 million per month. Fuel retailing: RIL has commissioned 1,253 retail outlets in the first quarter of FY 2018 as compared to 1,221 in the fourth quarter of FY 2017,” according to Axis Direct.

Q2 earnings FY 2018

Mukesh Ambani’s ambitious telecom venture Reliance Jio reported a loss of Rs 270.59 crore in its first quarterly financial performance for the period ended 30 September. However, Reliance Industries Ltd’s fiscal second-quarter net profit at Rs 8,097 crore just about met the expectations despite the Jio loss, on the back of healthy refining margins. Reliance Jio Infocomm Ltd (Jio), a wholly owned subsidiary of Reliance Industries Limited (RIL), which commenced its business in September last year reported its revenue at Rs 6,147 crore and EBITDA at Rs 1,443 crore posting a margin of 23.5%. The company said that it had recorded a positive EBIT due to strong user additions and cost efficiencies, which made a positive contribution to RIL’s Q2 results.

Reliance Industries is India’s largest private sector company, it has one of the largest refining capacity and also the largest producer of petrochemical.

*The prices of 24K gold per gram in New Delhi are taken to calculate the percentage appreciation.

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