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<keyword id="19938772" type="General" weightage="20" keywordseo="Reliance-Industries-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries Ltd" meta.hostid="267" meta.entityid="Reliance Industries Ltd">Reliance Industries Ltd</keyword> has won a vote of confidence from global rating agencies <keyword id="20043943" type="General" weightage="20" keywordseo="SP" source="keywords">S&amp;P</keyword> and <keyword id="19950093" type="General" weightage="20" keywordseo="Fitch" source="keywords">Fitch</keyword> after its robust earnings in the fiscal year ended March 31, 2024, supported its growth aspirations and kept leverage under check. S&amp;P Global Ratings and Fitch Ratings in separate notes spoke of its <keyword id="19957744" type="General" weightage="20" keywordseo="EBITDA" source="keywords">EBITDA</keyword> (loosely known as pre-tax profit) rising in the current fiscal year and next on rising revenue and past investments. "<keyword id="19896380" type="General" weightage="20" keywordseo="Reliance-Industries" source="keywords">Reliance Industries</keyword> Ltd's (<keyword id="20002939" type="General" weightage="20" keywordseo="ril" source="keywords">RIL</keyword>) strong earnings will keep leverage in check as the company continues to pursue growth ambitions. We expect the company's debt-to-EBITDA ratio to remain commensurate with the rating (BBB+/Stable/--)," S&amp;P said in a note. The oil-to-telecom-and-retail conglomerate's growth aspirations remain intact, it said, adding the company has ramped up investments in the media business in recent months. In 2024, it entered into binding definitive agreements with The Walt Disney Co for a media joint venture in which RIL will invest Rs 11,500 crore. The company subsequently agreed to buy Paramount Global's 13.01 per cent stake in local entertainment network Viacom18 Media Pte Ltd for about Rs 4,300 crore. "These investments are in line with RIL's strategy to diversify and have a strong presence in a few key industries," the rating agency said. Also, the company received government approval in 2024 to develop gas reserves in the KG-D6 block in the Bay Of Bengal. This could increase the company's gas production capacity by 13-17 per cent. RIL's earlier announced investments include a Rs 75,000 crore expansion plan over five years (starting 2022) for the oil-to-chemicals business. "RIL's earnings will benefit from past investments," S&amp;P said. "We project the company's adjusted EBITDA will rise 2-4 per cent in fiscal 2025 (year ending March 31, 2025)," it added. Just as in the past two years, the digital services segment (Reliance Jio Infocomm Ltd) will be the key growth driver, with segment's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) increasing 10-12 per cent in fiscal 2025. Reliance Jio's wireless subscriber base and average revenue per user will gain from the company's investments in its 5G network since late 2022. Meanwhile, earnings in the oil and gas as well as retail segments will reap the rewards of increased production volume and a wider retail store network. "The EBITDA improvement that we expect in fiscal 2025 comes after a 14 per cent increase to Rs 1.6 lakh crore in fiscal 2024," it said. S&amp;P saw RIL's rising earnings providing it greater balance-sheet flexibility for growth. "We expect the combination of robust operating performances and continued spending to keep the company's debt-to-EBITDA ratio at 1.8x-2.0x over the next two years. This compares with our estimate of 1.7x for fiscal 2024 and our downgrade trigger of 2.5x," S&amp;P said. RIL's leverage has some distance from the upper end of the company's internal leverage target. RIL has reiterated its intention to keep its net debt-to-EBITDA ratio (by its own calculations) below 1x. The ratio was 0.65x as of March 31, 2024. Separately, Fitch Ratings said RIL's EBITDA net leverage is likely to remain below 1x in the medium term, supported by increasing cash flows and lower capex intensity, even as the conglomerate's absolute capex and investments remain high in the near term. "We expect RIL's EBITDA to increase by 8 per cent year-on-year in the financial year ending March 2025 (FY25) and 14 per cent in FY26, while capex intensity (capex/revenue) is likely to reduce below 13 per cent by FY26 (FY24: 15.3 per cent). Lower capex intensity would be driven by growing revenue and reduction in capex after FY25," it said. Fitch expected the conglomerate's Cash Flow from Operations (CFO) to be sufficient to fund its capex from FY26, which will limit additional debt funding and keep its EBITDA net leverage below 1.0x in the medium term (FY24: 0.9x, FY23: 1.1x). "Fitch estimates RIL's FY24 EBITDA net leverage at 0.9x, better than our expectation of 1.1x, driven by marginally higher EBITDA and Rs 20,900 crore of equity raised mainly from the sale of a stake in a subsidiary, even as its capex remained high at Rs 1.5 lakh crore (FY23: Rs 1.4 lakh crore)," the rating agency said in a statement. It rates RIL at 'BBB'/Stable, one notch above India's rating (BBB-/Stable). "We expect the EBITDA increase in the near to medium term to be driven by the telecom and retail businesses, supported by contribution from the upstream oil and gas segment and marginal recovery in petrochemical spreads in the oil to chemical (O2C) segment," Fitch said, adding EBITDA from digital services, largely telecom, is likely to benefit from a 10-15 per cent tariff hike and 15-20 million of additional subscribers in FY25 (FY24: 482 million subscribers). Digital services EBITDA rose by 13 per cent in FY24, as Reliance added 42 million subscribers and monthly average revenue per user increased to Rs 182. Monthly user data consumption increased by 24 per cent to 28.7 GB, one of the highest globally. Fitch expected retail EBITDA to increase by 20-25 per cent in FY25 (FY24: 28%) as Reliance continues to expand its physical stores and digital channels. EBITDA would be supported by a 22.2 per cent increase in its registered customer base to 304 million in FY24. Also, O2C segment EBITDA is expected to remain above Rs 60,000 crore in FY25 (FY24: Rs 62,400 crore), as a gradual improvement in petrochemical spreads from FY24 lows is expected as a supply overhang recedes. Upstream oil and gas EBITDA should stay at around Rs 20,000 crore in FY25 (FY24: Rs 20,200 crore), assisted by the expectation of a 10 per cent increase in gas production in the first full year of operation of three gas fields in the KG-D6 block, which should offset the potential reduction in price realisation with lower gas prices in international benchmarks. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/jnk-india-ipo-allotment-how-to-check-allotment-gmp-listing-date-and-more/articleshow/109597273.cms">JNK India IPO allotment – How to check allotment, GMP, listing date and more</a> <a href="https://www.businessinsider.in/tech/news/jiocinema-introduces-new-ad-free-premium-plans-starting-at-29/articleshow/109581033.cms">An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema</a> <a href="https://www.businessinsider.in/business/auto/webstories/ultraviolette-f77-mach-2-electric-sports-bike-launched-in-india-starting-at-2-99-lakh/slidelist/109615934.cms">Ultraviolette F77 Mach 2 electric sports bike launched in India starting at ₹2.99 lakh</a>

Reliance gets thumbs-up from S&P, Fitch as strong earnings keep leverage in check

<keyword id="8460033" type="General" weightage="20" keywordseo="bofa-securities" source="Orion">BofA Securities</keyword> has given a 'Buy' call for E Ink, Hundsun, Japan Airlines, Mazda Motor, PICC Group, <keyword id="6355199" type="General" weightage="20" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword>, Samsung F&amp;M, SBI Cards, and United Breweries for the July-September 2023 quarter. The financial services company sees potential return on investments in the range 6-72 %. It, however, gave an 'Underperform' rating for IDP Education, with a potential 16 % downside in its stock price. BofA Securities said they presented a list of 10 quarterly stock recommendations among Asia Pacific companies, based on the view that these stocks could have the most significant market and business-related catalysts in the quarter ahead. "Given the breadth and scope of our overall coverage of stocks and sectors in Asia Pac, we recognize this recommended list cannot include nor is it designed to include all major catalysts. Our objective is to identify what we believe will be the highest impact ideas in each quarter when we publish the list," the financial services company said. For Reliance, the financial services company has a 'Buy' rating as Jio has emerged as the top telecom player in a growing market in India. "Reliance's telecom subsidiary -Jio - has garnered a large number of paying subscribers. Service quality perceptions continue to improve. Data demand appears to be sticky, and relatively less price sensitive," it said. "Reliance is also completing a major petrochemicals expansion, which should significantly increase its free cash flow potential. Continued improvements at Jio and FCF (free cash flow) generation should drive upside." Explaining the rationale behind the recommendation, it said it maintained 'Buy' on Reliance Industries after finding find risk-reward favorable as it heads into its Annual General Meeting (likely in August). With Jio making investments in 5G, BofA Securities sees further room for the company to gain market share -- mainly at the expense of Vodafone Idea. "Furthermore, any better-than-expected revenues in fiber broadband or digital initiatives could surprise positively." The Indian conglomerate foraying into "high-margin" niches like chocolates, cosmetics, and beverages by making acquisitions is also a positive, BofA Securities said. Further, it said Reliance's oil-to-chemical business is well positioned to generate $9-9.5 billion EBITDA for the next three years, thus providing cash-flow stability. "We also consider <keyword id="6484187" type="General" weightage="20" keywordseo="ril" source="Orion">RIL</keyword> to be one of the very few Indian companies who have potential to be big in clean energy space mainly in solar, battery, electrolyser and fuel cells as they are setting gigafactories," it added. (ANI)

Reliance among BofA Securities' top 10 Asia Pacific stock recommendations

<ul><li>In December, <keyword id="6357979" type="General" weightage="20" keywordseo="mutual-funds" source="Orion">mutual funds</keyword> deployed ₹14,700 crore in the secondary market.</li><li>Mutual funds participated in the IPO of five of the seven companies that debuted on the stock exchanges during December.</li><li>Key stocks that mutual funds bought in the month of December include HDFC, Reliance Industries and Maruti Suzuki.</li><li>While smallcap funds and midcap funds witnessed highest flows during December, multicap, largecap , flexicap and focused schemes were out of flavour as they either saw outflow or negligible inflows.</li><li>SIP inflows hit an all-time high of ₹13,573 crore in December. </li></ul>In December, mutual funds deployed ₹14,700 crore in the secondary market while foreign institutional investors (FIIs) sold ₹6,300 crore, says a report by Nuvama Institutional Equities (previously known as Edelweiss Institutional Equities). Mutual funds have also participated strongly in initial public offerings (IPOs) in December – investing in five of the seven initial public offers that made their debuts on the stock exchanges during the month. The fund houses deployed ₹440 crore in Kfin Technologies, ₹150 crore in Sula Vineyards, ₹120 crore in Landmark Cars, ₹100 crore in Elin Electronics and ₹20 crore in Radiant Cash Management. Inflows into equity mutual fund schemes also more than tripled to ₹7,303 crore in December, from ₹2,258 crore in November, according to Association of Mutual Funds in India (AMFI). This means that inflows into equity MFs have been positive for 22 months straight now. Key stocks that mutual funds bought in the month of December include HDFC, Reliance Industries and Maruti Suzuki while they trimmed their holdings in Axis Bank, HCL Technologies and ICICI Bank, as per Nuvama. <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;">Key additions by MFs </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;">Key deductions by MFs </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;">HDFC (₹2,410 crore) </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;">Axis Bank (₹1,330 crore) </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;">Reliance Industries (₹1,890 crore) </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;">HCL Technologies (₹830 crore) </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;">Maruti Suzuki (₹1,670 crore) </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;">ICICI Bank (₹570 crore) </td></tr></tbody></table>(Source: Nuvama Institutional Equities) While smallcap funds and midcap funds witnessed highest flows for the month, multicap, largecap, flexicap and focused schemes were out of flavour with these witnessing either outflows or negligible inflows. This has been the trend for quite a few months now, says Nuvama. Strong inflows in mutual funds is because of consistent commitment made by retail investors through systematic investment plans (SIPs). The number of SIP accounts in the industry reached 6.12 crore in December against 6.04 crore in November. In fact, SIP inflows are at an all-time high, hitting ₹13,573 crore in December. Meanwhile, the net assets under management (AUM) of the mutual fund industry grew to ₹39.88 lakh crore from ₹37.72 lakh crore last year. <table style="border-width: initial; border-style: none;"></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;">Key additions in Midcap by MFs </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;">Key reductions in Midcap by MFs </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;">Key additions in Smallcap by MFs </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;">Key reductions in Smallcap by MFs </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;">Ajanta Pharma </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;">Narayana Hrudayalaya </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;">Sapphire Foods </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;">Amara Raja Batteries </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;">Jindal Stainless </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;">Gujarat Gas </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;">KFin Technologies </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;">Praj Industries </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;">Max Financial </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;">Ramco Cements </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;">GMM Pfaudler </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;">Eris Lifesciences </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;">Power Finance Corp </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;">Voltas </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;"> </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;"> </td></tr></tbody></table>(Source: Nuvama Institutional Equities) SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/hcl-tech-lowers-revenue-guidance-for-fy23-to-13-5-14-q3-revenue-and-profit-growth-beat-expectations/articleshow/96944379.cms">HCL Tech lowers revenue guidance for FY23 to 13.5-14%, Q3 revenue and profit growth beat expectations</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/infosys-results-q3-fy23-infosys-raises-revenue-guidance-for-fy23-to-16-16-5/articleshow/96941824.cms">Infosys raises revenue guidance for FY23 to 16-16.5%, revenue growth beats analyst expectations</a>

MFs add HDFC, Reliance Industries, KFin Tech, Sula Vineyards in December

<ul><li>Analysts believe that <keyword id="3820" type="General" weightage="20" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword>’s <keyword id="6355199" type="General" weightage="20" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword> could end the financial year 2021-22 on a high.</li><li>A continuation in the earnings upcycle is expected as chemical prices are rising, broadband subscribers are picking up, online retail gains traction and new energy investment picks up steam.</li><li>Shares of RIL have gained nearly 10%, outperforming benchmark index Sensex that tumbled nearly 6% so far in 2022.</li><li>The stock will remain in focus as investors await the firm’s March quarter earnings that is scheduled on May 6, Friday.</li></ul>Reliance Industries could bring cheer to its investors with the March earnings scheduled to be announced later today (May 6) as analysts believe the Mukesh Ambani-led company is looking at growth in three of its key businesses — refining, retail and telecom. Reliance Industries’ shares will be in focus as investors await the firm’s March quarter earnings that is scheduled on May 6, Friday. <div type="image" title="RIL chart 5" height="900" width="1200" msid="91356059" hostid="261"></div>Reliance Industries could see earnings upcycle as chemical prices are rising, broadband subscribers are picking up, online retail gains traction and new energy investment picks up, according to a report by Morgan Stanley as it states “an earnings upgrade cycle is taking hold and is key to reversing RIL's past year of underperformance.” Analysts at Yes Securities second the views as they say Reliance Industries is expected to report improvement in its earnings — on both quarterly and annual basis — on account of stronger refining margins. The revenue, however, would face a partial offset due to weaker margins in petrochemicals. Also read: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms</a> Retail and telecom to drive Reliance’ growth, with refining gains offset by rising crude oil prices This would be the seventh quarter of sequential improvement in Reliance’ earnings. In the March quarter, refining and telecom are expected to drive growth with some offsets from the petrochem side, say analysts. In fact, <keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> could post a <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">blockbuster ₹5,000 crore profit</a> in the March 2022 quarter. Analysts are gung-ho about the telecom sector’s performance in the March 2022 quarter. Analysts say that the telecom segment is expected to benefit from higher average revenue per user (ARPU) realisation whereas the retail segment would reap the benefits of sales traction driven by growth in network. Notably, RIL has invested more than <a href="https://www.businessinsider.in/retail/news/asias-richest-man-mukesh-ambani-is-on-a-shopping-spree-for-private-fashion-labels/articleshow/90439055.cms">$1 billion in acquiring assets and building capabilities</a> of <keyword id="58448" type="General" weightage="20" keywordseo="reliance-retail" source="Orion">Reliance Retail</keyword>. Also read: <a href="https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms">https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms</a> “With rising penetration and market share wins ahead in consumer businesses (telecom tech and retail), we see the medium term growth story remaining intact as well,” said Goldman Sachs. Besides, recently the stock has been rising on hopes of its new hydrogen energy segment. Reliance best positioned to capitalise on hydrogen (new energy) segment Global investment banking firm Morgan Stanley expects the hydrogen segment of RIL to contribute 10% to its earnings with a net asset value of $10 billion by the end of this decade (by 2030). Analysts at Morgan Stanley believe <a href="https://www.businessinsider.in/business/corporates/news/analysts-up-mukesh-ambanis-ril-target-price-by-over-20/articleshow/90981139.cms">hydrogen adoption plans </a>are quickly progressing in India in line with global peers, which makes RIL best positioned to capitalise on this segment. “For RIL, strong cash flow generation in the best in class old energy business (low cost structure and highest complexity) can fund the capex of the New Energy business and in turn drive one of the fastest and most profitable net zero transitions by 2035 amongst large energy companies, on our analysis,” said analysts at Goldman Sachs. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">Reliance Jio could post a blockbuster ₹5,000 crore profit in the March quarter, say analysts</a> <a href="https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms">Reliance Retail could touch new heights thanks to a muted third wave of COVID-19 and increased investments</a>

Reliance Industries could see an earnings boost driven by its three pillars — refining, retail and telecom

<ul><li>Shares of the Mukesh Ambani owned Reliance Industries fell sharply today by as much as 4% in reaction to its earnings results on Friday evening.</li><li>The company had reported a weaker than expected net profit with a fall in profitability for the first time in FY22.</li><li>Indian benchmark indices, Sensex and Nifty 50, also remain in a weak spot as there was a huge sell-off in shares of heavyweight Reliance Industries.</li></ul>Shares of oil-to-telecom conglomerate company owned by Mukesh Ambani were among the biggest losers on the street and one of the reason benchmark indices was still in red. Reliance Industries <a href="https://www.businessinsider.in/business/corporates/news/reliance-industries-first-indian-company-to-near-100-billion-in-revenue/articleshow/91381614.cms">reported </a>a weaker than expected net profit and also reported a fall in profitability for the first time in FY22. Indian benchmark indices, Sensex and Nifty 50 remained in a weak spot as there was a huge sell-off in shares of heavyweight Reliance Industries amid poor market conditions. The company posted a net profit of ₹18,000 crore with a revenue of ₹2.11 lakh crore in the March quarter – a decline of 12.25% in profit sequentially, while revenue is up 10.77%. Analysts expected a growth of 4.7% in profit and 14.5% in revenue. Consolidated profit after tax missed the street’s estimate by 4% year-on-year and 3% quarter-on-quarter due to lower other income and miss in retail business, say analysts at Sharekhan. <div type="image" title="ril profit 2" height="900" width="1200" msid="91433413" hostid="261"></div>Meanwhile, analysts at Kotak Institutional Equities feel rise in net debt levels, elevated capex and negative FCF (free cash flow) were a tad disappointing yet again in the March quarter earnings of the company. Quarterly performance of Reliance Retail in Jan-Mar was disappointing The latest report by Sharekhan analysing the company’s March quarter earnings states that the retail revenues were muted and remained flat on quarter versus expectation of decent growth in Jan-Mar. Further, analysts feel an IPO of the company’s consumer business would give better returns to investors over coming years and unlock value in the digital and retail business of the firm. Reliance Retail’s net profit declined by ₹120 crore in the January-March quarter of 2022, on a quarterly basis. The company reported a net profit of ₹2,139 crore in Q4 compared to ₹2,239 crore in the previous quarter. Even on a year-on-year basis, Reliance Retail’s net profit declined. Analysts at YES Securities believe <keyword id="6484187" type="General" weightage="20" keywordseo="ril" source="Orion">RIL</keyword>’s retail business could be impacted by the current inflationary environment in FY23. The report adds that the petrochemical environment appears weak primarily due to tepid Chinese demand and firmer naphtha prices. RIL exports Naphtha that typically is consumed in steam crackers for petrochemical manufacturing. Decline in subscribers at Reliance Jio remains a key negative, say analysts This is the third consecutive quarter of <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-results-q4-fy22-profit-revenue-subscriber-growth/articleshow/91374478.cms">subscriber loss </a>for Reliance Jio – it has lost over 30 million subscribers over the last three quarters. Overall, for the financial year 2021-22, Jio’s subscriber numbers are down by 16 million. Slower-than-expected subscriber additions and ramp-up of broadband services, remains a key risk for the company, says analysts at Sharekhan. The telecom segment posted 14% growth in its net profit between January and March 2022, which is Jio’s <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-results-q4-fy22-profit-revenue-subscriber-growth/articleshow/91374478.cms">strongest profit</a> growth in five quarters, but still below <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">analyst expectations of ₹5,000 crore quarterly profit</a>. On the bright side, analysys believe that the company's ARPU (average revenue per user) could improve further in FY23. As of 11:34 a.m, shares of the company were down 2.88% at ₹2,545 per share. Going ahead, analysts expect shares to increase by up to 27%. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></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;">Brokerage firm </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;">Target price </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;">Sharekhan </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;">₹3,050 </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;">YES Securities </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;">₹2,840 </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;">Kotak Securities </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;">₹3,050 </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;">Morgan Stanley </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;">₹3,253 </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;">Jefferies </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;">₹2,950 </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;">CLSA </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;">₹2,955 </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;">Goldman Sachs </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;">₹3,200 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/snacks-health-bills-electricity-bills-and-more-will-add-to-your-chunkier-home-loan-emis/articleshow/91429752.cms">Snacks, health bills, electricity bills and more will add to your chunkier home loan EMIs</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/last-day-to-subscribe-to-lic-ipo-gmp-drops-to-60/articleshow/91424705.cms">Last day to subscribe to LIC IPO, GMP drops to ₹60</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/campus-activewear-shares-debuts-at-21-premium-despite-weak-market-trends/articleshow/91430347.cms">Campus Activewear shares debuts at 21% premium despite weak market trends</a>

RIL tumbles nearly 4% on weaker than expected profits, slowdown in retail business and decline in Jio subscriber additions

<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

<ul><li>Rising crude oil and gas prices during the last few quarters because of supply side constraints led by the Russia Ukraine crisis has benefited the oil producer to mint more money.</li><li><keyword id="6354737" type="General" weightage="20" keywordseo="ongc" source="Orion">ONGC</keyword> enters the elite club of top most profitable companies in India as it makes a profit of ₹40,305 crore in FY22.</li><li>The oil producer has surpassed Tata Steel, TCS and HDFC Bank to reach the second position wherein Reliance Industries holds top position.</li></ul>State-owned oil explorer ONGC beat two Tata group firms - TCS and Tata Steel to become India’s second most profitable company, after Reliance Industries, in FY22. Its record profits came in spite of decline in production for the last 11-18 quarters, aging fields, and lack of new discoveries. However, crude oil prices soared to almost $140 a barrel - making even its low output very valuable. ONGC contributes to 70% of India’s total oil and gas production. “A rally in global crude oil and natural gas prices is a key driving factor behind ONGC’s profitability,” said a report by YES Securities. It added that any moderation in crude prices will affect its cash flows as its capex requirement is very high to maintain production in its aging fields. ONGC reported a net profit of ₹40,305 crore for FY22 surpassing Tata Steel, by a decent margin. It also beat one of India’s most valuable companies - TCS in terms of profits - after crude oil prices soared. <div type="image" title="top 5 companies col (1)" height="900" width="1200" msid="91890739" hostid="261"></div>Taxes, sanctions and more to affect ONGC profitability As expected, this rise in profitability might be unsustainable, especially since analysts believe that Russia-Ukraine tensions could settle down, cooling off the soaring crude. “ONGC’s performance depends on how long geopolitical tensions persist as its profits are directly connected to crude oil prices,” Sanjiv Bhasin, executive vice president, markets &amp; corporate affairs at India Infoline, told Business Insider India. Bhasin believes that these tensions will ease by mid-July. As soon as crude prices come down, so will ONGC’s place in the list of most profitable companies. “Brent will not sustain the $110 kind of level. One or two years down the line, Brent will cool down. The two year future market also shows prices cooling off about $80-$90 per barrel range so that will definitely impact the margins for ONGC,” Anshuman Khanna, the founding director of Valpro, told Business Insider India. While the advantages of the war might go away soon, its effects - like sanctions on Russia - could remain and can affect ONGC’s fortunes negatively. <div type="image" title="ongc (1)" height="900" width="1200" msid="91890758" hostid="261"></div>The Russian connection ONGC’s international arm, ONGC Videsh owns stakes in multiple energy assets in Russia. One of the country’s gas producing assets Sakhalin-I has already shown signs of trouble as US major Exxon said that it would exit the block. ONGC has a 20% stake in it, along with interests in Sakhalin II, and Vankor fields in Siberia. “Russian assets are facing two issues -- one is the fact that Russian crude is trading at a discount about $10-$20 to Brent and second issue is repatriation of Russian dividend from these assets because of sanctions. It’s a real risk, which could jeopardize their entire Russian investment,” Anshuman Khanna, the founding directors of Valpro, told Business Insider. The Indian government too isn’t allowing the state-owned oil explorer to enjoy its profits either. It is believed to collect some of it in the form of a <a href="http://theres-a-strong-case-to-levy-windfall-taxes-11653810086031.html">windfall tax on oil producing companies.</a> Analysts at Citi call this tax threat an overhang. There is speculation that the government might impose a 25% tax on profits of oil and gas producing companies as crude prices have surged over 50% in 2022. The stock has gained over the last one year, but does not reflect the positive impact of crude oil on its profits. The sanction risk and taxes are making its short-lived story of profitability even less enticing to investors. <div type="image" title="ONGC profit" height="900" width="1200" msid="91890803" hostid="261"></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/business/corporates/news/nykaa-to-face-competitive-heat-but-its-omni-channel-experience-maybe-the-game-changer/articleshow/91883946.cms">Nykaa to face competitive heat but its omni-channel experience maybe the game changer</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/finance/banks/news/citi-kotak-icici-and-other-investment-banks-earned-2600-crore-through-ipos-last-year/articleshow/91887303.cms">Indian companies raised $14 billion via IPOs and their i-bankers made $300 million in fees</a>

ONGC beats Tata Steel, TCS to become India’s 2nd most profitable company - but Russian links may spoil the party

<ul><li><keyword id="6355199" type="General" weightage="20" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword>’ shares were trading at ₹2,510 at 9:44 a.m., surpassing the previous high of ₹2,478. </li><li>The Mukesh Ambani-led conglomerate’s market capitalisation touched ₹16.9 lakh crore.</li><li>Separately, ICICI Direct had issued a hold call on Reliance Industries shares with a target price of ₹2,480 last week.</li></ul>Shares of Reliance Industries have been on a growth trajectory for over a year now and hit an all-time high on Monday, September 27, after it crossed the ₹2,500-mark. The Mukesh Ambani-led conglomerate’s market capitalisation touched ₹16.9 lakh crore. The company’s shares were trading at ₹2,510 at 9:44 a.m., surpassing the previous high of<a href="https://www.businessinsider.in/stock-market/news/mukesh-ambani-enters-100-billion-club-as-ril-stock-hits-a-record-high/slidelist/85969961.cms"> ₹2,478 on September 6</a>, 2021. RIL's shares closed at ₹2,524.45 on Monday. The stock rose as much as 25% in the last one year. The scrip has been gaining for the fourth consecutive session. <div type="image" title="Reliance Industries’ shares hit record high, trading at over ₹2500 in early morning trade" msid="86548050" hostid="261"></div>Separately, ICICI Direct <a href="https://bsmedia.business-standard.com/_media/bs/data/market-reports/equity-brokertips/2021-09/16322856470.31434600.pdf">issued</a> a hold call on Reliance Industries shares with a target price of ₹2,480 last week on September 22. The company's shares were then trading at ₹2,425. The analysts at ICICI Direct expected Reliance Industries to achieve the price point in a span of one year. Reliance Jio’s positioning in the digital ecosystem, Reliance Retail's aggressive store network expansion, the potential of oil-to-chemical (O2C) business to be segregated into a separate entity and the company’s upcoming investments in new energy initiatives were likely to trigger these future price performance, as per ICICI Direct. “Long term prospects and dominant standing of RIL in each of its product and service portfolio, provides comfort for long term value creation. RIL’s consumer business will be the growth driver, going ahead. The company has a strong balance sheet post fundraising while its traditional business will continue to generate steady cash flows. We initiate coverage on the stock with a HOLD recommendation,” the report reads. Reliance Industries ended the second quarter of 2021 — April to June — with a consolidated income of ₹1,48,591 crore, representing nearly 6% decline from ₹1,58,133 crore reported in the previous quarter. The company’s net profit also fell to ₹12,273 crore from ₹13,227 crore in the previous quarter. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/zee-entertainment-shares-fall-in-todays-trade-as-invesco-insists-the-board-to-hold-egm-before-sony-deal/articleshow/86546922.cms" data-type="tilCustomLink">Zee Entertainment shares fall 3% in today’s trade as Invesco insists the board to hold EGM before Sony deal</a> <a href="https://www.businessinsider.in/business/startups/news/ofbusiness-was-the-only-woman-led-startup-that-entered-the-unicorn-club-this-year/articleshow/86511076.cms">OfBusiness was the only woman led startup that entered the unicorn club this year</a> <a href="https://www.businessinsider.in/business/auto/news/teslas-full-self-driving-beta-programme-request-button-goes-live/articleshow/86525543.cms">Tesla's 'Full Self Driving' Beta programme request button goes live</a>

Reliance Industries’ shares hit record high, trading at over ₹2500

<ul><li>Supreme Court decision to make Airtel and Vodafone pay up spectrum dues gave a boost to RIL stock. </li><li>In the last one week, <a href="https://www.bloombergquint.com/business/ambani-said-in-talks-to-sell-news-assets-to-india-s-times-group">Bloomberg reported</a> that RIL has been trying to sell its media business to two different entities. </li><li>Ambani also said that he plans to turn the company<a href="https://www.businessinsider.in/airtel-tata-sky-and-pvr-shares-fall-after-mukesh-ambanis-vision-for-ril/articleshow/70655108.cms"> virtually net-debt free</a>. </li><li>This year, Reliance Retail also crossed ₹2,000 crore in pre-tax profits during the first quarter. </li></ul>It was a much anticipated event but the market value of Reliance Industries hit crossed ₹10 lakh crore in today’s trade. In the morning session it ₹10,00,382.68 crore even as the stock went up only by a marginal 0.5% today. But the company stock withstood erratic sessions of highs and lows and various global cues, to grow steadily for the last four months. The flurry of good news started after Ambani unveiled his next generation plans at his<a href="https://www.businessinsider.in/highlights-of-mukesh-ambani-speech-at-reliance-industries-agm/articleshow/70638299.cms"> annual general meeting</a>. But many unprecedented activities also made him the undisputed king of the telecom market. 
 
 
 
 
 
 
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 Rivals loss is Ambani’s gain Jio was gaining customers, mostly at the expense of Vodafone-Idea, but that came at the cost of very cheap prices. It wasn’t clear if Jio will be able to keep the lead if it raised tariff. That worry had been laid to rest after the top three mobile service providers ⁠— Airtel, Vodafone-Idea, and Reliance Jio⁠— announced their plans to<a href="https://www.businessinsider.in/business/corporates/news/jio-will-raise-tariffs-after-airtel-and-vodafone-idea/articleshow/72138425.cms"> hike</a> tariffs. It gave a golden opportunity for Jio to make more money while maintaining the lead over others. Then came the deathly blow for Jio’s rivals from none other than the Supreme Court, which ordered telcos to pay up around ₹92,000 crore ($13 billion) in dues to the Indian government. The companies had lost a decade-old case on how much they have to pay in spectrum fees that left them heavy interest and penalties included. The other two companies which were much older had to pay a lot more than Jio, which was a blessing in disguise for <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s company. Many stockholders believed that Jio would end up with a virtual monopoly over the market as the debt of Airtel and Vodafone is all set to rise The sentiment effect too boosted the stock value by a great margin for a few weeks. Sale of Reliance’s media business In the last one week, wire agency<a href="https://www.bloombergquint.com/business/ambani-said-in-talks-to-sell-news-assets-to-india-s-times-group"> Bloomberg reported</a> twice that RIL has been trying to sell its media business to two different entities—Japanese major Sony and the Times Group. The media business of Network18 that RIL acquired in 2014 is a loss-making entity. The group owns the television channels of Eenadu TV along with those of Network18 like CNBCTV18 and CNN-IBN, Colours and more. It also owns multiple websites like moneycontrol and Firstpost. The news of a possible sale and cash flowing also boosted the stock price. At the AGM in August, Ambani also said that he has plans to carve out retail and Jio into separate entities to unlock value. Plan to go debt free, bonuses and IPOs Apart from announcing various futuristic plans, Ambani also said that he plans to turn the company<a href="https://www.businessinsider.in/airtel-tata-sky-and-pvr-shares-fall-after-mukesh-ambanis-vision-for-ril/articleshow/70655108.cms"> virtually net-debt free</a>. For a company which is saddled with a debt of around ₹1.5 lakh crore, it is good news for investors. This is especially true in a market where every third company is either weighed down by or going <a href="https://www.businessinsider.in/thelife/personalities/news/subhash-chandra-the-man-who-started-tv-revolution-in-india-now-bows-out-after-piling-on-1-6-billion-debt/articleshow/72251788.cms">under debt burden</a>. He also walked the talk by announcing massive deals with international oil majors –British Petroleum and Saudi Aramco which will bring in as much as ₹1.1 lakh crore in commitments. Reliance Retail starts churning profits This year, Reliance Retail also crossed ₹2,000 crore in pre-tax profits during the first quarter. “In our core retail, we crossed the best margin ever at 8.9%. We now have 10,644 stores across the country now,” said Alok Agarwal, CFO of the company during <a href="https://www.businessinsider.in/mukesh-ambanis-reliance-retail-reports-over-47-growth-in-revenue/articleshow/70295939.cms">the quarterly results</a>. But this is not the only good news that the business brought. Ambani unveiled his plans to use the synergies of digital business of Jio with retail and take on Flipkart and Amazon in the online space. In fact, the company unveiled plans of a virtual reality powered shopping experience This, along with promise of public offers and possible bonuses put RIL stock on the fast lane.

Four reasons why Mukesh Ambani’s Reliance Industries is now worth ₹10 lakh crore

<ul><li>The US stocks ended lower on Wednesday as concerns grew over the fate of a US coronavirus stimulus deal. </li><li>Here’s a list of stocks to watch for in trade today. </li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider. </a></li></ul>Amidst mixed cues from the global markets, the Indian equities are likely to open flat on Thursday. In the Asian market, the SGX Nifty was trading 0.19% higher at 7:49 am, indicating a green start for Nifty50. However, the US stocks ended lower on Wednesday as hopes of a US coronavirus stimulus deal waned. The Dow Jones Industrial Average slid 165.81 points, whereas the S&amp;P 500 fell 0.66%. These are the stocks to watch out for during the trading session on October 15: Infosys Indian IT giant Infosys has reported a stellar quarter led by record deal wins, and it has also raised the <a href="https://www.businessinsider.in/business/corporates/news/infosys-second-quarter-earnings-deliver-on-all-fronts-led-by-highest-ever-deal-wins-worth-3-15-billion-raises-guidance-to-2-to-3/articleshow/78659827.cms">FY21 guidance</a>. The company also gave<a href="https://www.businessinsider.in/careers/news/infosys-to-reinstate-wage-hikes-promotions-and-hiring-will-impact-margins-over-the-next-six-months/articleshow/78660576.cms"> its employees 100% variable pay</a> over the last three months and restarted the promotion process for junior-level employees. The shares of Infosys ended 1.71% lower yesterday. SBI, ICICI Bank, HDFC Bank, and others Bank stocks will be in focus today after the Supreme Court adjourned the hearing on the ‘interest-on-interest’ waiver case on loan moratoriums to November 2. It has asked the Centre and banks to flesh out the details on implementation of the waiver. National Mineral Development Corporation (NMDC) The government on Wednesday, during the cabinet meeting, approved demerger of the under-construction Nagarnar steel plant (NSP) from NMDC and its strategic disinvestment by selling the entire stake of the Centre to a strategic buyer. “Shareholders of NMDC will also be shareholders of the demerged company (NSP) in the proportion of their shareholding. The investors will have better visibility of the operations and cash flow of NMDC and NSP separately,” the official statement said. The shares of NMDC ended 0.88% higher yesterday. Reliance Industries The Mukesh Ambani owned Reliance Industries’ retail arm Reliance Retail Ventures has received the subscription amount of ₹5,550 crore from KKR as per<a href="https://www.businessinsider.in/retail/news/indias-biggest-retailer-reliance-retail-is-now-valued-at-57-billion-following-a-fresh-investment-from-kkr/articleshow/78281374.cms"> their earlier agreement</a>. The shares of RIL ended 0.10% higher yesterday. PVR and Inox Leisure PVR and Inox Leisure share will also be in focus during the trade today. As per the MHA guidelines cinema halls are set to reopen in the different parts of the country adhering to the social distancing norms. The shares of PVR and Inox Leisure ended nearly a percent higher yesterday. United Spirits The Indian alcoholic beverages company United Spirits has entered into a definitive agreement to sell its entire shareholding in its non-operative subsidiary - Tern Distilleries Private Limited for ₹30 crore. The shares of United Spirits ended 0.62% lower yesterday. Indiabulls Housing Finance The National Housing Bank has levied a penalty of ₹3.5 lakh on Indiabulls Housing Finance for non-disclosure of related party transactions The shares of Indiabulls Housing Finance ended 7% higher yesterday. Tata Steel BSL Tata Steel BSL reported a consolidated net profit at ₹341.7 crore for the quarter ending September 30 compared to the loss of ₹244 crore during the same period last year. The revenue increased by 21.1% to ₹5,519.4 crore. The shares of Tata Steel BSL ended 5% higher yesterday. Jubilant Foodworks FPIs raised stake in the Indian parent company of pizza maker Jubilant Foodworks to 37.86% in September, up from 36.19% in the June quarter. The shares of Jubilant Foodworks ended 1.81% higher yesterday. Likhitha Infrastructure The shares of oil and gas pipeline infrastructure service provider, Likhitha Infrastructure will <a href="https://www.businessinsider.in/stock-market/news/likhitha-infrastructure-shares-to-list-tomorrow-on-bse-and-nse/articleshow/78660431.cms">list</a> on the bourses today. SEE ALSO: <a href="https://www.businessinsider.in/careers/news/infosys-to-reinstate-wage-hikes-promotions-and-hiring-will-impact-margins-over-the-next-six-months/articleshow/78660576.cms" data-type="tilCustomLink">Infosys to reinstate wage hikes, promotions and hiring — will impact margins over the next six months</a> <a href="https://www.businessinsider.in/stock-market/news/likhitha-infrastructure-shares-to-list-tomorrow-on-bse-and-nse/articleshow/78660431.cms" data-type="tilCustomLink">Likhitha Infrastructure trades at 13% grey market premium ahead of listing today </a>

Top stocks to watch — Infosys, RIL, SBI, ICICI Bank, HDFC Bank, NMDC, Jubilant Foodworks, and others

The entire world will be watching the <keyword id="6356435" type="ORGANIZATION" weightage="20" keywordseo="US-Federal-reserve">US Federal Reserve</keyword> this week and how much money <keyword id="1727754" type="PERSON" weightage="20" keywordseo="Jerome-Powell">Jerome Powell</keyword> is willing to prop up the American economy, which is expected to contract 4.6% this year, according to Goldman Sachs. The best outcome, according to ING, will be a signal that the Fed will allow US inflation to shoot over the preset 2% target. But, there may already be inflation just not where you are looking Aside from gold, there are a handful of stocks raking up most of the money in many markets across the world. The combined market value of the three iconic companies, Apple, Microsoft, and Amazon, was already bigger than the entire German economy⁠— the fourth largest in the world⁠— at the start of the year. Now, they are even bigger. <table style="width: 373pt;"> </colgroup> <tbody><tr> <td class="xl63" style="height:15.0pt;width:149pt">Stock</td> <td class="xl63" style="border-left-width: initial; border-left-style: none; width: 143pt;">Market capitalisation</td> <td class="xl63" style="border-left-width: initial; border-left-style: none; width: 81pt;">2020 gains</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;"> Apple</td> <td class="xl63" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">$1.6 trillion</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">23.30%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Microsoft</td> <td class="xl63" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">$1.52 trillion</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">25.30%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Amazon</td> <td class="xl63" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">$1.5 trillion</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">58.50%</td> </tr></tbody></table> “I think we actually have high inflation, but due to these side effects it is showing up in stock prices instead of consumer prices,” financial market expert John Mauldin wrote in a report on July 24. The concentration of gains has gotten worse since the pandemic began Mauldin pointed out that the likes of Microsoft, Apple, Amazon, Google, Netflix, and Adobe are part of ten stocks that have gained 35% or more this year, whereas the remaining 490 stocks in the S&amp;P 500 are down 10% or more. He calls this ‘inflation’, a term that usually denotes rising in prices of consumer items. “If the concept of reversion to the mean holds, either their sales are getting ready to explode, or their stock prices are going to fall. Or some combination,” he said. Something similar is happening in India. The gains in Reliance Industries⁠— which is now the world’s second-largest energy company after Exxon⁠— in the last six months is over 46%. The benchmark Sensex is still in the red for the said period. There are only 14 stocks in the benchmark Nifty50 index that are in the green for the year, the remaining 36 are in the red. Only half of those have seen gains of over 20% since the beginning of 2020, two of those are drug makers Dr Reddy’s Laboratories and Cipla. The broader indices have a lot more red than green. <table style="width: 373pt;"> </colgroup> <tbody><tr> <td class="xl67" style="height:15.0pt;width:149pt">Stock</td> <td class="xl67" style="border-left-width: initial; border-left-style: none; width: 143pt;">Market capitalisation</td> <td class="xl67" style="border-left-width: initial; border-left-style: none; width: 81pt;">2020 gains</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Reliance Industries</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;"> ₹14.4 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">44.08%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Dr Reddy's Labs</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;"> ₹669.2 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">39.08%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Cipla</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹527.9 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">36.88%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Infosys</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹3.97 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">27.48%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Britannia</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹911.9 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">25.41%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Bharti Airtel</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹3.02 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">21.35%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">HCL Tech</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹1.8 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">20.52%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Nestle India</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹1.6 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">17.42%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Hindustan Unilever</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹5.17 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">14.54%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Mahindra &amp; Mahindra</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹705.29 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">11.84%</td> </tr></tbody></table> What pushed so much money into so few stocks? In a world gripped by crisis, risk aversion is the norm. Therefore, investors like to take shelter in big companies, market leaders in their own space, and well-diversified conglomerates where at least one wing makes money when many others don’t. One of the reasons why RIL — which has businesses from oil refining to telecom to retail to now, e-commerce⁠— was able to raise over $20 billion from global investors like Facebook, Google, and Intel to name a few at the peak of the pandemic. There will be more funds raised for the retail vertical now, Asia's richest man Mukesh Ambani recently promised. It’s not just the feeling of safety in familiarity and size According to Mauldin, the current bull market is a kind of perfect cash flow storm. <ul><li>Legions of new investors using stimulus money to buy whatever makes them feel good </li><li>Bored gamblers looking for action, </li><li>Large institutions brimming with Fed liquidity </li><li>Traders of all sizes, small investors to monster hedge funds, chasing momentum—a perfect witches’ brew </li></ul>"...all in the context of ultra-low interest rates that make cash and fixed-income holdings unattractive. You could not have designed a better perfect storm in which to create a market mania, and that’s exactly what we have,” he added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/markets/news/icici-bank-share-price-falls-alongside-sbi-hdfc-bank-kotak-mahindra-bank-and-other-banking-stocks/articleshow/77191098.cms">The fall in ICICI Bank shares reflects the market’s dislike banking stocks this week</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/google-has-been-sued-in-australia-for-alleged-misuse-of-personal-data/articleshow/77190288.cms">Google has been sued in Australia for alleged misuse of personal data</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/google-has-been-sued-in-australia-for-alleged-misuse-of-personal-data/articleshow/77190288.cms"></a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/an-indian-court-has-summoned-jack-ma-for-wrongfully-firing-an-indian-employee/articleshow/77183378.cms">An Indian court has summoned Jack Ma for wrongfully firing an Indian employee</a>

A market expert sees ‘a perfect storm’ brewing in Amazon, Apple and Microsoft shares⁠

After effectively turning debt free, <keyword id="6355199" type="COMPANY" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> (RIL) may see IPOs of its flourishing telecom arm Jio and retail business segment, unlocking additional shareholder value, Bernstein Research said in a report on Wednesday. RIL has raised USD 22.3 billion capital market through the sale of 24.7 per cent stake in <keyword id="9093411" type="COMPANY" weightage="20" keywordseo="Jio-Platforms">Jio Platforms</keyword> and USD 7 billion equity-raise. "Following the rights issues and 24.7 per cent sell down in Jio, RIL is now effectively debt free. We expect a break-up of the company in the next three-four years through the IPO of Jio and retail business segment which should further unlock shareholder value," the analyst said. Looking at the balance sheet, Reliance has significantly improved its financial position following the transactions, it said, adding that the net debt to equity will fall significantly from 0.51x in FY20 to 0.06x in FY21 which is the lowest in almost a decade. Given the USD 15 billion <keyword id="8360798" type="UNKNOWN" weightage="20" keywordseo="aramco-deal">Aramco deal</keyword> and free cash flow outlook in the next several years, net debt to equity could continue to fall beyond FY21, it said. Reliance is in talks with Aramco to sell a fifth of its USD 75 billion oil-to-chemical business. "The key question is what will Reliance do with the significant cash position? We think the priority for now is to reduce other liabilities on the balance sheet such as deferred payments and provisions which total in excess of Rs 50,000 crore," it said. Given the company's expansion into internet and retail, more investments including mergers and acquisitions seem highly likely, the brokerage said adding that refining and petchem could also see expansion with the Aramco partnership. "Overall, we expect RIL will continue to invest in growth over returning cash to shareholders," it said. While earnings will soften in FY21 due to COVID-19, the brokerage believed that RIL is at the start of a secular growth period driven by telecom, retail and new economy related business. "We estimate EBITDA for FY21 of Rs 86,000 crore, which is almost double what it was a few years ago," it said. "On our estimates, we believe that EBITDA can double again through to FY25, mainly through the growth in Jio and new business, while the energy related business will be relatively flat (assuming the 20 per cent divestment to Aramco)." It raised its price target for RIL from Rs 1,720 to Rs 1,870. "The higher valuation comes primarily from retail, media and other marketable investments on the balance sheet."

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