RIL's telecom, oil projects to push up profits: CLSA

Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    Reliance Industries' much talked about USD 11 billion 4G telecom venture is likely to be launched this year which together with start of key oil projects will help it near double pre-tax profit, says a report.

    "2015/FY16 will prove to be one of the most important years in recent past for Reliance. Several of its important projects will come to fruition during 2015," CLSA said in a research report as per the PTI.

    RIL's telecom, oil projects to push up profits: CLSA
    "We expect the launch of its much talked about 4G telecom services in 1H2015.

    This will be followed by commissioning of key downstream (oil) expansion projects in 2HFY16 viz. the petcoke gasification plant, refinery off-gas cracker and large expansion of its Paraxylene capacity," it added.

    Also, clarity on the premium over the current price of USD 5.61 per million British thermal unit to be paid to gas finds in deep sea and approvals for key deepwater discoveries of RIL should kick-start the development, it said.

    However, continued weakness in crude price may prove to be a challenge for its shale gas business in 2015.

    "We expect Reliance Retail to further strengthen its positioning," CLSA said.

    "Launch of the USD 11 billion 4G telecom service, clarity on gas price premium for deepwater discoveries and start of the key projects in its ongoing USD14 billion downstream expansion are all slated in 2015.

    These projects should drive a near doubling in EBITDA and makes Reliance the strongest two-year earnings growth story in global large cap oil space," it said.

    RIL's two year EBITDA as well as net profit growth is the best amongst the global large cap oil stocks.

    CLSA expected gas output to rise to 48 million standard cubic meters per day by 2020 from current production of less than 14 mmscmd as RIL brings R-cluster and other satellite gas fields in the eastern offshore KG-D6 block into production.

    "We sense excessive pessimism on Reliance's 4G telecom foray and launch of services in 1H-2015 should provide some comfort.

    This will also allow investors to focus on the key downstream projects which will drive over 90 per cent increase in EBITDA in next three years after three years of decline," it added.

    Historically, RIL's strong stock performance has coincided with years when large projects have started. The next 12-18 months may be another such period for the stock.

    Read more about: reliance industries
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'
    India's LARGEST EVER political poll. Have you participated yet?

    Find IFSC

    Get Latest News alerts from Goodreturns

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more