|
|
|
HSBC maintains 'buy' for RIL, raises target price to Rs 1,880
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 30 Jun, 2020
HSBC Global Research has maintained 'buy' for RIL shares and has
increased the target price to Rs 1,880 on deleveraging initiatives,
higher valuations of, primarily, retail and telecom.
The previous
target price was Rs 1,590 per share. Currently, RIL shares are
currently trading at Rs 1,722.15 on the BSE, lower by Re 1 or 0.06 per
cent from its previous close.
In a report HSBC said: "A strong
balance sheet built from the cash-generating refining and petrochem
businesses allowed RIL to incubate businesses with long gestation
periods, like telecom and retail."
Over the last five years, the
core business of refining and petrochemicals has generated $40 billion
of operational free cash flow, of which it consumed $20 billion for its
own capacity and efficiency enhancements. The balance of $20 billion,
plus an additional $10 billion in the form of debt, has been used to
incubate retail and telecom businesses, it said.
"Now, all these
new businesses have become cash generating, with retail generating
EBITDA>Capex and telecom likely to generate EBITDA>capex in FY21.
RIL is now beginning to incubate a new financial services business," it
said.
With the recent deleveraging exercise, involving a rights
issue and the sale of a stake in the Jio Platform to multiple investors,
RIL has created a kitty of $22.5 billion, allowing it to become net
debt free by FY21 per RIL calculations, and FY22 per HSBC calculations.
"This
positions it strongly for increasing the penetration of the existing
consumer businesses and new businesses like financial services," the
report said.
"We believe that, post the deleveraging exercise,
RIL's balance sheet has immensely strengthened. With each of its
businesses now capable of generating cash flows for themselves, we
believe RIL will once again become a cash generating machine, thus
allowing it to chart its next phase of growth," it added.
The report, however, noted sustained weakness in refining and petro chemical business as a downside risk.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|