Here's why CLSA and Edelweiss have downgraded Reliance Industries' stock

Edelweiss Securities notes that the stock’s primary triggers – deleveraging, asset monetisation and digital momentum – have already played out.

Market News: It has been a dream run for Reliance Industries’ (RIL) stock in calendar year 2020 (CY20). From hitting a low of Rs 868 on March 23, the stock has skyrocketed over 150 per cent to a record high of Rs 2,199 on July 27. The stellar rally came on the back of a series of big-ticket investments by marquee names such as Facebook, Google, Intel Capital, and Qualcomm Ventures into RIL’s digital arm, Jio Platforms. Further, the company’s announcement of becoming a net-debt free entity way before its schedule of March 31, 2021, made Street in awe of RIL, thus firing up the stock price.

However, not everyone looks convinced with the current valuation of the stock and believes that the market is way too optimistic on Mukesh Ambani-controlled RIL, overlooking the risks associated with it. For instance, Edelweiss Securities, in its report dated July 27, notes that the stock’s primary triggers — deleveraging, asset monetisation and digital momentum — have already played out. Also, the current exuberance witnessed in the stock seems redux of euphoria seen earlier, in 1994 (India liberalisation), 2000 (Y2K bug), and 2008 (KG-D6 offshore gas field), which suggests associated risk is high. Edelweiss has downgraded the stock to ‘Hold’ from ‘Buy’ with the target price of Rs 2,105.

Edelweiss Securities notes that its two-stage reverse-discounted cash flow (DCF) analysis of RIL stock shows that the market is baking in high earnings per share (EPS) growth, particularly for Jio Platforms – 35 per cent compound annual growth rate (CAGR) and 31 per cent for Reliance Retail sustaining over the next ten years, which by any measure is a tall ask.

Nita Ambani named to the board of New York-based Metropolitan Museum of Art

Nita Ambani, 57, was elected to become an honorary trustee of the museum, according to the statement.

Nita Ambani, philanthropist and wife of Asia’s richest person, was named to the board of the largest U.S. art museum after years of supporting exhibitions at the New York City institution. Ambani’s backing “has had an enormous impact on the museum’s ability to study and display art from every corner of the world,” Daniel Brodsky, the Metropolitan Museum of Art’s chairman, said Tuesday in a statement.

The wife of Mukesh Ambani, chairman of refining-to-telecom giant Reliance Industries Ltd, has been promoting Indian art and culture around the world along with sports and development programs inside the country as the head of the conglomerate’s foundation. Nita Ambani, 57, was elected to become an honorary trustee of the museum, according to the statement.

The 149-year-old Metropolitan museum draws billionaires, celebrities and millions of visitors a year to see art spanning 5,000 years from around the world. The not-for-profit institution reported revenue, support and transfers of $384.7 million in 2018 at the operating level, down from $385.3 million the previous year, according to its annual report.

Why Mukesh Ambani’s ‘cautious actions’ could be a bad sign for the economy

Why is Ambani hitting the brakes on a seven-year, $100 billion investment spree across refining, petrochemicals, telecom and retail?

Does Mukesh Ambani see dark clouds gathering on the horizon? From his message to shareholders, it doesn’t look like India’s richest tycoon is worried. But his actions may reveal more than his words.

At Monday’s annual general meeting, the chairman of Reliance Industries Ltd was brimming with optimism. Not only did he endorse Prime Minister Narendra Modi’s vision of bumping up annual GDP by 80% in five years to $5 trillion, he even forecast a $10 trillion Indian economy by 2030. It’s not only possible but “inevitable,” he said.

Something doesn’t add up. If the outlook is so rosy, why is Ambani hitting the brakes on a seven-year, $100 billion investment spree across refining, petrochemicals, telecom and retail? While a breather after such frenzied activity may be understandable, why does he want Reliance to be a zero-net-debt company in 18 months? What will it mean for the more than 100 banks and financial institutions around the world that provide India’s largest company and its subsidiaries with billions of dollars – and yen, and rupees – in financing and refinancing? Above all, what will Reliance’s deleveraging mean for India?

From 15,000 to 5 million: How RIL is planning to digitise kirana stores

Dependence, with a profound impression in more than 10,000 Reliance Retail outlets skillet India, is attempting to make the world’s biggest online-to-disconnected web based business stage in the nation

Most extravagant Indian Mukesh Ambani-drove Reliance Industries’ entrance into internet retailing will help grow the current 15,000 digitized retail locations to more than 5 million by 2023, an investigation of Bank of America Merrill Lynch said. As much as 90 percent of India’s $700 billion retail advertise is sloppy, made up for the most part of neighborhood kirana stores selling perishables and different sundries. These kirana stores are quick to redesign their tech and this is driving a flood of modernization, the examination said.

“This is on the back of developing challenge from present day exchange and internet business,” it said. “GST execution has additionally gone about as an impetus, making further modernization weight as GST consistent bills must be created.”

Dependence, with a profound impression in more than 10,000 Reliance Stores in India, is attempting to make the world’s biggest online-to-disconnected web based business stage in the nation. Dependence is taking a gander at in troducing its Jio MPoS (portable purpose of-offer) gadget at kirana stores to interface neighborhood providers to its fast 4G arrange that can be utilized by its clients to arrange supplies.

It will take on SnapBizz, Nukkad Shops and GoFrugal in this divided MPoS space. While Jio MPoS is accessible at a one-time venture of Rs 3,000, SnapBiz offers a similar machine at a one-time cost of Rs 50,000, the report said. Once charge on Nukkad Shops is Rs 30,000 to Rs 55,000 while GoFrugal offers POS programming at a one-time speculation of Rs 15,000 to Rs 1 lakh. Jio MPoS has no trader rebate rate (MDR) on any charge and offers a dedication program, it stated, including its monetisation technique incorporate product conveyance, publicizing and supply-side collection.

“We accept, with RIL’s entrance, we could see an expansion in dealer versatility, as the value focuses will probably descended (RIL’s present one time store is Rs 3,000) and reach ought to extend. “Combination is likewise a plausibility; as a major player, RIL is entering a generally dispersed market…

Reliance Industries market cap touches $100-bn mark, stock at record high

RIL became the second Indian company to scale the milestone after TCS.

 

Reliance Industries (RIL) market capitalisation (market cap) surpassed the $100 billion mark, after its stock price soaring to a record high of Rs 1,090, up 5% on Thursday on the BSE in intra-day trade. It became the second Indian company to scale the milestone after TCS.

At 11:56 am; RIL market cap stood at Rs 6.88 trillion or $ 100 billion mark, the BSE data shows. The stock was quoting at Rs 1,088, up 4.9%. On comparison, the S&P BSE Sensex was up over 1%.

Earlier, Mukesh Ambani-led RIL broke the $100 billion barrier in 2007. Tata Consultancy Services (TCS), the IT giant, is on top of the rank with Rs 7.57 trillion market cap, data shows.(CLICK HERE : Reliance Industry share price)

The rally in RIL comes after it announced an aggressive plan in its 41st annual general meeting and ahead of its June quarter earnings.

Mukesh Ambani, Chairman and Managing Director in the AGM launched ultra high speed fixed line broadband services for homes and enterprises under the brand of JioGigaFiber on July 5. “Fiber will redefine 24/7 emergency help for all homes across India and Jio will offer the most competitive broadband connection.”

The oil-retail-to-telecom giant has invested Rs 2.5 lakh crore in fiber connectivity.

RIL’s net profits grew by more than 20.6 percent to Rs 36,075 crore in FY18. Reliance’s earnings profile underwent a fundamental change this year.(Article source : BS) 

JioPhone 2, Jio GigaFibre, Jio GigaTV announced: Things you need to know

Mukesh Ambani said upgraded JioPhones will have social media applications such as YouTube and Facebook, along with instant messaging service Whatsapp.

 

phone features in-build FM, NFC, GPS and Wi-Fi. The JioPhone 2 will also have access to social media applications such as YouTube and Facebook, along with instant messaging service WhatsApp. The phone will be available starting from August 15 at an introductory price of Rs 2,999.

Jio GigaFibre

After running trials at select cities, Mukesh Ambani on Thursday announced Jio’s fixed-line broadband services, which would be launched in 1,100 cities simultaneously for homes, merchants and small and medium enterprises and large enterprises. According to the company, Jio GigaFibre services would offer internet speed of up to one gigabyte per second (Gbps). The company did not announce the launch date or plans, but interested users can register their interest for Jio GigaFibre services on Jio web portal starting August 15. The locality that shows major interest would be among the first locations to get Jio’s home broadband services, according to Mukesh Ambani.

Jio GigaTV

Jio’s digital television content services is a part of GigaFibre internet services. The GigaTV set-top-box would offer internet-based digital content services, along with access to Jio’s app suite. Interestingly, the set-top-box would also support a video calling feature, which would allow users to make video calls from their televisions. It is still to be seen how the feature would work as the televisions currently does not support camera, in-build or external. The GigaTV remote would be voice-enabled, which would make it work with voice commands – something similar to how the Amazon’s Fire Stick remote works.

READ MORE ABOUT ON JIO PHONE  2 

RIL 41st Annual General Meeting today: Key announcements of last 3 editions

As India awaits for this year’s announcements, here are the major announcements that Mukesh Ambani made in last three AGMs

 

Reliance Industries will hold its 41st annual general meeting (AGM) on Thursday.

In the past few years, the company’s chairman, Mukesh Ambani, has used the occasion to make major announcements. This year too the expectations are high.

Here’s what happened in the previous years

2017:

JioPhone launch: Mukesh Ambani announced the launch of the ‘effectively free’ JioPhone in India. The phone is sold at a refundable deposit of Rs 1,500.

Success of Jio: According to the company, Jio’s subscriber base crossed 100 million in less than 170 days from the launch date. Ambani said Jio helped data consumption rise from 200 million GB to 1.2 billion GB in India.

The company had also announced that Jio services would cover 99 per cent of India’s population in 12 months.

2016:

The launch of Reliance Jio dominated the AGM in 2016. Mukesh Ambani announced a slew of attractive schemes along with the launch of 4G telecom. The highlights were 4G devices from Rs 2,999, cheap data plans, unlimited night-time 4G connection and free Jio-to-Jio voice calls, among others.

The project, pegged at Rs 1.5 trillion, saw a soft-launch in December 2015, when RIL offered mobile connections and discounted handsets to its over 100,000 employees.

Ambani also announced new Lyf devices with prices starting at Rs 2,999 and going up to Rs 5,999. The AGM also saw the launch of 4G LTE JioFi router at 1,999.

2015:

It was in 2015, that Mukesh Ambani first announced the launch of Reliance Jio. He also announced ambitious plans to expand the company’s retail business, saying that the company will expand its network from 200 outlets to 900 outlets over the next year.

Ambani also said Reliance will roll out an e-commerce model that will integrate online and offline retail.

Read More : Reliance AGM

Maharashtra govt’s move to ban use of plastic puts RIL in recycle mode

Company creating platform for building corpus and setting up full-fledged sustainability team

 

The Maharashtra government’s decision in March to partially ban the use of plastic has put the country’s largest polymer producer in recycle mode. The Mukesh Ambani-led Reliance Industries (RIL) is now creating a platform for recycling, building a corpus and setting up a full-fledged sustainability team.

“The ban from Maharashtra was more of a wake-up call for the industry,” said Vipul Shah, chief operating officer of RIL’s petrochemicals business. RIL had homework in place over the last couple of years. The ban accelerated the process, he added.

“There was earlier a small team of two to three people working on a smaller project like bottle recycling. We now have a full-fledged department for sustainability of seven to eight people working full time and another 10-12 moonlighting,” Shah added.

ALSO READ: Reliance Industries, Bajaj Finance, Jubilant FoodWorks hit new highs

RIL is the country’s largest producer of polymer, the main raw material required for making plastic items. Shah did not share details on how much of the company’s polymer production is consumed through plastic bags and other items banned in the state.

“The exposure to banned items is minimal, less than three per cent maybe. It is more likely to affect small enterprises. As for RIL, there are other segments to cater to,” said a person with direct knowledge of the business.

Part of the sustainability team’s job is to develop an extended producer responsibility (EPR) platform for the industry. “Being the largest polymer producer, we want to design something that is adaptable to India and not a copy from Europe. We want to design the whole chain from segregation, collection, secondary segregation, recycling, generating energy and oil,” Shah added.

The corpus, he said, would be funded through RIL’s petrochemicals business, not as part of its corporate social responsibility programme.

It makes for a curious case as to why RIL, with presence from oil to telecom, is not planning to enter bio-degradable bag manufacturing. “We have not considered making bio-degradable bags but continue to do research at the other end of it, in terms of whether we can make bio-degradable compounds for polymer,” Shah said. Himachal Pradesh was the first state to ban plastic bags in 2003. Delhi, Sikkim, Rajasthan and Goa are others that have followed suit.

Keep Reading : Plastic ban 

Here is what Airtel, Idea and Vodafone are offering to counter Reliance Jio

Old telcos have sweetened their offerings considerably to take on the Reliance Jio challenge

Reliance Jio made a big announcement on Tuesday following which the road ahead doesn't look smooth for rivals Airtel, Idea Cellular, Vodafone, among others. Although the free services provided since its launch, including 1GB data at 4G speeds every day, unlimited voice calls and unlimited text messages will be over after 31 March, the operator has introduced a new plan called Jio Prime which will allow users to avail the facilities for another year at a nominal price. 

Here are the key points:

Membership: Jio Prime membership is limited to the 100 million existing Reliance Jio users as well as those who join the network before March 31, 2017.

Cost: All Jio members can enroll prime membership for a one time fee of Rs 99 (which is valid for one year). Additionally, to get the free mobile data and other benefits, users will need to pay another Rs. 303 per month for the next 12 months (which amounts to Rs 10 per day, approximately).

Subscription: To subscribe, users can go to any Jio store or Jio partner store. Besides, MyJio app and Jio.com website can also be used. 
Commencement: Users can start subscribing to the plan from March 1. It will end on March 31.

Offers: Under the plan, unlimited mobile data for a year (1GB daily FUP limit), media and content benefits associated with the Jio apps suite are available. "There will be many other attractive deals and offers from both Jio and its partners (for) the Jio Prime members," a statement released by the company said. Like the current offer, Jio Prime will also reduce the internet speed to 128kbps after the 1GB data per day limit is crossed.

Users who do not subscribe: Reliance Jio users who opt not to subscribe the Jio Prime membership will have to pay for data and other services, but not voice calls (including on roaming)

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A quick look at the offers provided by Vodafone, Airtel and Idea:

Vodafone

• Vodafone announced seven new 4G plans for prepaid users last month.
• The plan starts at Rs 150 for which user gets 1GB of 4G data valid for 30 days.Similarly, 4G services at Rs 250, 4GB data, at Rs 350, 6GB data, at Rs 450, 9GB  data, at Rs 650, 13GB data, at Rs 999 Plan 22GB data and Rs 1500 Plan 35GB   data are available for 30 days. Unlike Reliance Jio, there is no daily limit in any of the plans.
• Only prepaid customers can avail these plans. Airtel.

Airtel 

At present, the telecom company has two plans on offer that gives some sort of a competition to Reliance Jio.  

Prepaid 4G data plan: It provides 30GB of 4G data at Rs 1,495 for three months. 

Special 4G data plan:

• It offers data worth Rs 9,000 for 12 months to customers who switch to Airtel 4G.The 12 months offer is available to any customer with a 4G mobile handset, and who is currently not on the Airtel network. Any customer, including existing Airtel customers, upgrading to a new 4G handset can also avail this offer.
• This offer can be availed only till February 28, 2017.

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