Reliance Industries extends rally; stock soars 25% in three weeks

Reliance Industries (RIL) was up 4.4% to Rs 1,288 on the BSE in early morning trade extending its rally on the bourses. The stock was trading at its highest level since May 23, 2008, when it touched 1,318.50 during intra-day trade.

RIL on Thursday after market hours informed the stock exchanges that entities forming part of the promoter group of the company intend to acquire from other promoter group entities by way of ‘inter-se’ transfer aggregating up to 1,190 million shares of RIL.

The oil giant, however, clarified that this is an inter-se transfer of shares among promoter entities and the move would not lead to any change in promoter shareholding.

Meanwhile, in past three weeks, the stock outperformed the market by surging 25% from Rs 1,030 on February 20, as compared to 1.6% rise in the S&P BSE Sensex.

RIL's market capitalisation rose 20%, or Rs 69,500 crore, to Rs 4.18 lakh crore after February 21, when the company announced that its telecom venture Reliance Jio Infocomm (RJIO) had secured 100 million customers.

“RJIO’s tariff of Rs 303 is a positive for telecom business as EBITDA ((earnings before interest, taxes, depreciation and amortization) break-even could be achieved earlier than expected. RJIO could break even at the EBITDA level at an ARPU (average revenue per unit) of Rs 303 and a 50 million subscriber base (assumed 50% retention on the current subscriber base of 100 million),” according to analysts at Sharekhan.

“Thus, the enrolment for the RJIO prime membership would be a crucial parameter to watch out for the company. We expect a break-even at the PBT (profit before tax) level by FY2020 as the pace of subscriber addition would slow down after the end of the free offer on 31-March-2017. RJIO’s financial performance remains crucial for balance sheet deleveraging over FY2018-20,” the brokerage firm said in recent report and maintains ‘buy’ rating on the stock with revised price target of Rs 1,400.

At 10:10 am; the stock was trading at Rs 1,273 on BSE as compared to 0.31% decline in the benchmark index. A combined 7.35 million shares changed hands on the counter on the BSE and NSE so far.

Reliance Industries Limited (RIL)