India’s second-largest company by market capitalisation, Reliance Industries will hold its 42nd annual general meeting (AGM) on Monday, August 12 in Mumbai which would be eyed by both investors as well as analyst community.
The stock rallied from Rs 964 recorded on 5th July 2018 when RIL held its 41st AGM, to Rs 1,162 registered on Friday, 9 August, which translates into a rally of over 20 percent.
Investors could see the launch of Jio Phone 3, commercial rollout and pricing of Jio’s broadband service GigaFiber, and the triple play plan for GigaFiber that bundles broadband, landline as well as television services, are also expected to be announced at the RIL AGM, CNBC-TV18 said quoting market sources.
Jio Phone 2 was launched at the last AGM and carried a price tag of Rs 2,999. Its next iteration, Jio Phone 3, is expected to be priced at Rs 4,500, the report added.
AK Prabhakar, Head of Research at IDBI Capital expects the launch of triple play plan for GigaFiber which bundles broadband with DTH as well as a telephone in one package. Pricing is something which will be watched by the D-Street.
The pricing for the broadband plans is expected to be in line with peers but RIL will sweeten the deal by making it a triple play —a combination of broadband-landline-TV OTT service. A base price of ranging between Rs 500-600 for GigaFiber is expected, according to CNBC-TV18 report.
Catch LIVE updates of the Reliance Industries AGM here
Apart from Jio broadband rollout as well as the launch of Jio Phone 3, some analysts will also keep a close eye on the deleveraging plan, expansion on the retail front, as well as any important development on the refining front.
"Focus will be more on its retail, telecom business expansion plan, and fund mobilisation. Also, towards its oil refining business front some important announcement is expected," Sanjeev Jain, VP Equity Research at Sunness Capital India Pvt Ltd, told Moneycontrol.
Last week, Credit Suisse said that the company is expected to remain free-cash-flow negative over FY20-21, just as it has been for the last six years. The report further added that liabilities have dramatically gone up to $65 billion in FY19 from $19 billion in FY15.
Reliance Industries, the country's second largest company by market capitalisation, reported a consolidated profit after tax of Rs 10,104 crore for the June quarter, up 6.8 percent from a year ago. The net profit also beat a poll of analysts which had pegged the profits at Rs 9,852 crore.
“Investors would watch out for some news from RIL on how it can substantially deleverage its balance sheet through either induction of a partner in the refinery business because there were some talks of a deal with Saudi Aramco,” Ajay Bodke CEO- PMS Prabhudas Lilladher told Moneycontrol.
The analyst would watch out for a medium-term plan for monetizing their stake in the refinery, retail, fiber, and tower business because the company has become net debt company from a net cash company amid expansion plans.
The second thing that investors would watch out for would be the return ratios, said Bodke. He further explained that with increased contribution of consumer-focused business like retail and telecom – investors would expect the return ratio of the company to move northwards to just premium valuations compared to pure-play refining and Petro companies.
Across the globe, refining and pro companies’ trade at a low PE ratio because they are capital intensive, explained Bodke.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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