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RIL hits market cap landmark but still behind global luxury brands, Netflix in valuation

RIL to HDFC Bank to ITC – Here are the 10 most valuable Indian companies

<ul><li>Bharti <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword>’s brand value stood at $7.7 billion, the highest among any other telecom company in India.</li><li>VI, previously known as Vodafone Idea, was a distant third as its brand value was under a billion dollars.</li><li>Bharti Airtel’s presence across 16 countries have given it a competitive edge over Reliance <keyword id="2003276" type="General" weightage="20" keywordseo="jio" source="Orion">Jio</keyword> in terms of subscriber base and financials.</li></ul>Despite being the biggest telecom service provider in the country, Mukesh Ambani owned Reliance Jio has not been able to surpass Airtel in brand value. According to a Brand Finance report, Bharti Airtel’s brand value stood at $7.7 billion — the highest among any other telecom company in India. It also increased by 28% during the year. Mukesh Ambani-led Reliance Jio stood at second position with brand value of $5.1 billion, and also gained 5% this year. VI, previously known as Vodafone Idea, was a distant third as its brand value was under a billion dollars. It stood at $767 million as it faces numerous business challenges due to its debt, along with other troubles like the AGR issue. <cmsannotation type="cmsannotation" annotationid="Infosys overtakes LIC and the second most valuable brand" comment="subhead" text="Infosys overtakes LIC and the second most valuable brand">Infosys overtakes LIC and the second most valuable brand</cmsannotation> Infosys with its $12.8 billion brand value has also managed to overtake Life Insurance Corporation (LIC) ($11.1 billion brand value) to become the second most valuable Indian brand this year. “Infosys has shown impressive growth this year, making it the fastest-growing IT services brand globally of 2022, thanks to its commitment to clients and focus on innovation,” the report said. The development comes even as LIC spent a lot of time, money and efforts on marketing in 2021 for its initial public offering. Tata Group remains India’s most valuable brand, with a value of $24 billion. <cmsannotation type="cmsannotation" annotationid="Airtel knows how to make money off subscribers" comment="subhead" text="Airtel knows how to make money off subscribers">Airtel knows how to make money off subscribers</cmsannotation> Airtel surpassing Reliance Jio in terms of brand value comes as a surprise, given that Reliance Jio is the biggest wireless service provider in India with a market share of over 35%. According to Telecom Regulatory Authority of India (TRAI), Airtel’s share is slightly lower at 31.56%. However, the point of difference for the two companies is simple — Airtel has not limited itself to the Indian market. While Jio focuses on growing in India, Bharti Airtel has spread its presence in 16 countries across South Asia and Africa. This has not only increased the company’s brand value but also its ability to make money. <div type="image" title="Mukesh Ambani&amp;#39;s Jio lags behind Airtel which is the top telecom brand in India" msid="91935277" hostid="261"></div> READ MORE: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-vs-bharti-airtel-four-charts-to-showcase-how-indian-telecom-giants-faired-in-2022/slidelist/91640306.cms">Reliance Jio vs Bharti Airtel — four charts that showcase how the Indian telecom giants faired in 2022</a> <cmsannotation type="cmsannotation" annotationid="Reliance Jio has higher subscriber base, but only in India" comment="subhead" text="Reliance Jio has higher subscriber base, but only in India">Reliance Jio has higher subscriber base, but only in India</cmsannotation> Bharti Airtel does fall short of Jio in the Indian market in terms of number of subscribers, but its global presence catapults it past its competitors. Airtel had 360 million subscribers in India in March 2022, but overall it has 491 million subscribers across the 16 countries it is present in. Simultaneously, Reliance Jio was at second position with 410 million subscribers, all of them coming from India. <div type="image" title="Mukesh Ambani&amp;#39;s Jio lags behind Airtel which is the top telecom brand in India" msid="91935345" hostid="261"></div> All these factors also contributed to Airtel’s supremacy in revenues too. Airtel closed the fiscal year 2022 with a revenue of ₹117,081 crore, while it turned its ₹12,364 crore loss into a profit of ₹8,305 crore. Jio, on the other hand, reported a revenue of ₹95,804 crore, with a profit of ₹15,487 crore. <div type="image" title="Mukesh Ambani&amp;#39;s Jio lags behind Airtel which is the top telecom brand in India" msid="91935374" hostid="261"></div> SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/foreign-inventors-hit-a-record-with-selloffs-in-may-and-they-will-keep-exiting-say-experts/articleshow/91934731.cms">Foreign investors are as spooked as they were in the first month of lockdown in India</a> <a href="http://www.businessinsider.in/business/corporates/news/zomato-paytm-nykaa-and-others-spent-6000-crore-on-their-employees-last-year/articleshow/91931970.cms" data-type="tilCustomLink">Zomato, Paytm, Nykaa and others spent ₹6,000 crore on their employees last year </a> <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/maruti-suzuki-tata-motors-bata-india-metal-stocks-among-stocks-to-watch-out-for-on-june-1/slidelist/91930439.cms">Maruti Suzuki, Tata Motors, Bata India, metal stocks among stocks to watch out for on June 1</a>

Mukesh Ambani's Jio lags behind Airtel which is the top telecom brand in India

<ul><li><keyword id="6484187" type="General" weightage="80" keywordseo="ril" source="Orion">RIL</keyword> is now entering its fourth capex cycle, says <keyword id="48670" type="General" weightage="50" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword>. </li><li>It has pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into the new energy ecosystem. </li><li>RIL’s investment cycles provided 2-3x value creation for shareholders in the last two decades, says Morgan Stanley. </li><li>“We see up to $60 billion value creation in the new energy business by 2025,” the report says. </li><li>However, if refining margins are hit, <keyword id="10926" type="General" weightage="50" keywordseo="reliance" source="Orion">Reliance</keyword>’s annual debt will go up by $3 billion per annum and impact cash flows. </li></ul>Reliance has always gone big – and every capex cycle it undertakes is bigger and ‘newer’ than the last. The oil to telecom to retail major is now entering into the fourth capex cycle, according to Morgan Stanley, after the company pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into a new energy ecosystem. In his own words, RIL’s chairman <keyword id="3820" type="General" weightage="50" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword> called it the most ambitious ever, at the 45th annual general meeting. In its latest report, Morgan Stanley says that every time RIL re-imagined its business, it has executed above investor expectations. “Investment cycles have unwound with around two to three times value creation for shareholders in the last two decades with every decade seeing around $60 billion in market cap creation,” the report says. This fourth cycle will also produce higher value quickly as its new energy pivot is integrated with its chemicals business and its own large captive use. “RIL’s integrated approach on solar panels and mobility/storage batteries, and focus on providing an alternative to China does stand out and we see up to $60 billion value creation in the new energy business by 2025. We raise our base case new energy valuation to $32 billion to account for quicker monetization,” the report says. RIL, which is a net energy consumer at Jamnagar, will make the green choice by putting more solar and green hydrogen projects that can help reduce its own energy costs. Moreso, it will also focus on producing high value added chemicals from its petcoke gasifiers. It will also enter the engineering, procurement and construction business for selling panels and sell panels with solutions on the back of multiple investments in technology to global customers. “We estimate the business to contribute to around $1 billion in EBITDA by 2027,” the report said. How did the past RIL capex cycles work? Starting in 1997 with Jamnagar refinery commissioning, RIL has gone through three important capex cycles so far. These pertain to gas fields at KGD6, the Jamnagar expansion in 2012 and the great re-entry into telecom. While they did create value, it did not come at no cost to the organization in the form of write-offs, impairments and ‘challenged capex’. “In every capex cycle, RIL also had its share of challenges, such as the write off of investments for petcoke gasifiers, telecom spectrum and upstream shale investments,” the report said. RIL had invested in three shale gas assets in 2010 and 2013 but exited them in 2017. In addition to investing in KGD6 block in the Krishna Godavari which is producing over 25 mmscmd of gas, RIL had also invested in Cauvery and Mahanadi basins over the years. RIL also had to rejig its investments in retail between 2006-2010 and emerged stronger in 2015-16, the report said. RIL capex that was challenged <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Challenged capex </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY03-FY10 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$12.5 billion upstream exploration and production -Includes $2.7 billion impairment taken on shale investments </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY12-FY16 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$8 billion capex into petcoke gasifier </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY18 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$2 billion spectrum writeoff </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$4 billion impact on petcoke gasifier value during hiveoff </td></tr></tbody></table>Source: Morgan Stanley Telecom and retail businesses are ‘settling’ Morgan Stanley believes that the timing for new energy investments is ripe. Its other businesses are unwinding and expected to unwind faster in the future. After kick starting the business with ‘free data’ and still retaining the tag of providing the cheapest data offerings, <keyword id="2003276" type="General" weightage="50" keywordseo="jio" source="Orion">Jio</keyword> is on the verge of reaping benefits. Telecom business has become a three-player market and the report expects the average revenue per user to grow by over 50% over the next four to five 5 years. That means Jio’s revenues can expand to 1.6 times its FY22 levels. It also expects its 5G investments to yield quicker monetization than 4G did. The biggest advantage that new energy investments bring is the global and national support as India pledges to move towards Net Zero emissions by 2070. However, green hydrogen, solar panels and battery technology is a fast evolving sector with new changes afoot. “Policy support in this cycle is also increasing for the new energy vertical and the government recently approved a bill in parliament to raise the use of alternative fuels, provide incentives for investments in new energy and start carbon trading also points to rising total addressable market for RIL – something we saw less of in previous cycles,” the report said. But there is a catch. For its new energy business to run smoothly, RIL needs its refining business to hold steady. Refining margins fund nearly a third of RIL's investment plans and if margins were to decline to cycle low as the business is cyclical — it will reduce operating cash flows by 20% and annual debt would rise by $3 billion, as per Morgan Stanley’s calculations. “While cycle low gross refining margins are not sustainable as there would be a supply response, we do see a net impact of 15% hit to our net asset value as RIL would see its multiple de-rate as well,” the report said. SEE ALSO <a href="https://www.businessinsider.in/business/corporates/jamnagar-is-going-green-but-on-the-back-of-its-oil-and-chemicals-business/articleshow/93859168.cms">Jamnagar is going green but on the back of its oil and chemicals business</a> <a href="https://www.businessinsider.in/business/corporates/news/gautam-adanis-overly-ambitious-growth-plans-can-spiral-into-a-massive-debt-trap-fitch/articleshow/93725014.cms">Gautam Adani’s overly ambitious growth plans can spiral into a massive debt trap: CreditSights report</a> <a href="https://www.businessinsider.in/finance/news/worst-of-times-can-also-be-the-best-of-times-says-anand-mahindra/articleshow/93376032.cms">Worst of times can also be the best of times, says Anand Mahindra</a>

RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

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RIL hits market cap landmark but still behind global luxury brands, Netflix in valuation

Katya Naidu

RIL to HDFC Bank to ITC – Here are the 10 most valuable Indian companies

Sourabh Jain

Mukesh Ambani's Jio lags behind Airtel which is the top telecom brand in India

Kritti Bhalla

RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

Katya Naidu

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