Next phase of value creation will be from monetisation of Jio users beyond telecom, Credit Suisse said
Reliance Industries shares gained nearly a percent in the morning trade on April 4 as global investment firm Credit Suisse expects strong earnings growth from refining, retail and telecom businesses.
The stock rallied more than 50 percent in the last one year and 12 percent in one month. At 0917 hours IST, it was quoting at Rs 1,381.75, up Rs 7.95, or 0.58 percent on the BSE.
While having a neutral rating on the company and target price of Rs 1,425 (implying 3.7 percent potential upside), the global brokerage said the company has positively surprised with fast scale-up in telecom and retail segments.
Next phase of value creation will be from monetisation of Jio users beyond telecom, it added.
According to Credit Suisse, Jio's earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to more than double to $5 billion by FY22 and retail EBITDA CAGR may be more than 35 percent over FY19-21.
On the refining business front, the brokerage sees margin expansion and expects 25 percent EBITDA CAGR over FY19-21.
Meanwhile, Reliance Industries, on April 3, said its subsidiary Reliance Jio Digital Services Limited (RJDSL) has entered into a definitive business transfer agreement with Haptik Infotech Pvt Ltd (Haptik).
"The transaction size, including investment for growth and expansion, is estimated at about Rs 700 crore, with Rs 230 crore as the consideration for the initial business transfer, it added.
The Haptik team will continue to drive growth of the business, including the enterprise platform as well as digital consumer assistants.
On a fully diluted basis Reliance will hold about around 87 percent of the business with the rest being held by Haptik founders and employees through stock option grants.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.