RIL gains nearly 2% after CLSA maintains buy rating, sees 36% upside
By the end of 2019, Jio could get to 40 crore subscribers, CLSA said
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Global brokerage house CLSA has maintained buy call on Reliance Industries with a target price at Rs 1,500, implying 36.5 percent potential upside from the closing of January 4.
The stock gained 1.7 percent in the early trade on January 7.
The research expects the start of full-fledged e-commerce as well as an omnichannel retail platform.
Mukesh Dhirubhai Ambani, Chairman and Managing Director of the oil-retail-to-telecom major had said in Q2FY19 earnings release that company's commitment to create consumer value was gathering momentum, with the robust scale-up of India centric consumer-facing businesses.
"The financial performance of both Retail and Jio reflect the benefits of scale, technology and operational efficiencies. Retail business EBITDA has grown three-fold YoY whereas Reliance Jio EBITDA has grown nearly 2.5 times. Jio has now crossed 250 million subscriber milestone and continues to be the largest mobile data carrier in the world," he explained.
He, in company's 41st annual general meeting speech in July, had said New Commerce platform had the potential to redefine retailing in India and become one of the biggest new growth engines for Reliance in the years to come.
"We are also looking at nation-wide platforms in Agriculture, Education and Healthcare. I am confident that growth in these consumer businesses, based on asset-light platforms of the future, will be nonlinear and exponential," he added.
Concerns on capex and debt should be allayed by mid-2019, CLSA said, adding big gross refining margin boost from International Maritime Organization and strong subscriber addition are core triggers.
By the end of 2019, Jio could get to 40 crore subscribers, the research house said.
At 1028 hours IST, the stock was quoting at Rs 1,117.00, up Rs 17.95, or 1.63 percent on the BSE.
Disclaimer: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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