CLSA reiterates ‘conviction buy’ on RIL

MUMBAI: CLSA has reiterated its ‘conviction buy’ on shares of Reliance Industries ( RIL) and raised target price on it to Rs 1,350 from Rs 1,275 after building in estimates for the company’s telecom arm Reliance Jio Infocomm.

RIL’s recently unveiled invite-based system to expand its test launch user base suggests an approaching commercial launch for Jio by September or October this year, CLSA said, adding that Jio is likely to be seen as a success.

“We assume a commercial start from Oct’16 and model in 25m/70m subscribers by the end of FY17/18. We estimate Jio’s Ebitda/FCF/PBT break-even in FY18/19/20. Building in initial losses from Jio, we cut FY17-18 consol EPS by 20%,” CLSA said.

Shares of RIL were up 1.3% at Rs 982.