RIL market-cap crosses Rs 13.5-trillion as stock hits new high

RIL Chairman Mukesh Ambani
Reliance Industries’ market capitalisation (m-cap), including the partly paid shares, crossed the Rs 13.5-trillion mark after both the stocks hit their respective new highs on the BSE on Thursday.

At the close, the market valuation of the fully paid shares stood at Rs 13.06 trillion and that of partly paid shares was Rs 49,888 crore, giving it a total m-cap of Rs 13.56 trillion. RIL crossed the Rs 13-trillion m-cap mark this month itself. Fully paid shares of RIL hit a new high of Rs 2,078.90 a share, up 3.7 per cent, while partly paid shares, too, hit a fresh record high of Rs 1,194, up 8 per cent in intra-day trade on the BSE on Thursday.

In the past one week, the stock of RIL has outperformed the market by surging 12 per cent, as compared to nearly 5 per cent rise in the S&P BSE Sensex. RIL's Annual General Meeting (AGM) held on July 15, 2020, continued to focus on the next Gen business. It discussed various opportunities, growth levers, and strategic initiatives in the consumer business in detail.

RIL on Tuesday after market hours said, the board of directors of the company is scheduled to meet on Thursday, July 30, 2020, instead of on Friday, July 24, 2020, as intimated earlier, to consider unaudited financial results of the company for the quarter ended June 30, 2020 (Q1FY21).

Analysts expect Jio EBITDA to increase driven by subscriber additions (10 mn in Q1) and higher average revenue per user (ARPU) (Rs 135) while retail will decline due to seasonal weakness and the Covid-19-led lockdown.

“RJio should deliver revenue/EBITDA CAGR of 21%/41% over FY20-22E along with strong EBITDA margin expansion. The company has witnessed subdued average revenue per user (ARPU) growth in 4QFY20, which we believe could be due to its longer validity plans. The full benefit of the price hike should accrue in FY21,” Motilal Oswal Securities said in a note.

In addition, the favorable competitive landscape in the Indian telecom industry should offer healthy incremental EBITDA gains through a combination of ARPU increase and market share gains. The company has additional earnings opportunity from its ambitions in JioFiber and other digital avenues. "Furthermore, RJio’s lower debt and market leadership position increase our conviction in the company. Thus, we believe it should garner premium valuations as compared to competitors," it said.

The brokerage firm further said as Reliance Retail’s business recovers from the ongoing Covid-19 impact in FY21, the robust footprint addition across the three verticals – grocery, consumer electronics, and fashion – should bring the aggressive revenue growth on track.

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