RIL gets brokerage 'likes' post AGM; should you take a look?

Global brokerage houses remained upbeat on the oil-to-telecom behemoth Reliance after the company’s 41st annual general meeting.

Morgan Stanley believes that RIL’s focus to capitalise last six years’ investments should help in raising return on equity. It also estimated that the company’s return on capital employed (RoCE) can rise 400 basis points to 12.40 per cent by FY20.

The global brokerage house maintained ‘Overweight’ on RIL with a target price of Rs 1,241.


CLSA and Citi retained ‘Buy’ on RIL with a target price of Rs 1,230 and Rs 1180, respectively. “Next stage of Jio unveiled in the AGM. We see EBITDA CAGR of 24 per cent over FY18-21,” Citi said.

CLSA added that consumer upgrading higher tariff data plan is key for Jio and new features should boost subscription addition.

The stock went up 1.49 per cent to Rs 979.40 on Friday while the benchmark Sensex rose 90 points to 35,664.

The company's telecom arm, Jio, has 215 million customers and is on track to cover 99 per cent of the country, Reliance Chairman and India's richest man Mukesh Ambani said on Thursday, addressing the AGM.

RIL also unveiled a new fibre broadband system across 1,100 cities on Thursday, stepping up its push on Internet services. The company will begin registrations for its fibre-to-home service JioGigaFiber from August 15, the Independence Day.

Reliance shares have surged nearly 83 per cent since September 1, 2016, the day its telecom service was launched. Jio turned profitable within a year of its operation.