Stock Fundamentals

Reality Check: Relief rally - RIL

ANAND KALYANARAMAN | Updated on January 13, 2018

RIL eps

Market behemoth Reliance Industries, somnolent for a long time, sprang to life on the bourses last week. The stock jumped 11 per cent on Wednesday following the company’s announcement that it would start charging for RJio’s services from April. The market seems relieved that the telecom business, in which billions have been poured in, will start generating revenues. The free service since the September launch has been an industry disruptor and instrumental in RJio garnering over 100 million customers. But it also caused concerns on revenue visibility and impact on the company’s return matrices.

This was a reason why the stock did not pep up, despite a good show by the refining and petrochemicals segments for the past many quarters. While the fee charged is a positive, it will still be quite some time before RJio breaks even. Also, it remains to be seen whether customers will stick on, once the service is charged, even if very competitively.

Published on February 26, 2017

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