Shares of Reliance Industries have fallen up to 6 percent in the last one week. It is expected to decline further in the coming days. This has been estimated by a foreign brokerage firm.
Reliance shares fall
The stars of Mukesh Ambani, the country’s richest person and owner of Reliance Industries (RIL), are in the spotlight these days. That is why despite important announcements in the 44th AGM meeting of Reliance, the trend of decline in its stock is not stopping. Within a week, the share price of RIL has fallen by more than 6%. In such a situation, there is another bad news for Ambani. In fact, global brokerage firm Macquarie Group has given it a rating of ‘underperform’. Also, this year the company’s stock is expected to fall by 35 percent.
According to the global brokerage firm, the 12-month target price for RIL has been kept at Rs 1350 per share. This is 35 percent less than the current market price of the company. Reliance’s shares have risen 5.8 per cent so far this year, while it has gained 13 per cent in Nifty50, yet it is far from meeting its annual target. It is to be known that a few days ago, Reliance had talked about investing 75 thousand crore rupees in the new energy business in the AGM. Despite such a big announcement, it failed to attract investors.
It is difficult to meet the target even with JioPhone Next
According to Macri’s analysts, Reliance had announced the launch of JioPhone Next. By FY 2023, it could have up to 500 million users. With this, the company’s ARPU will be Rs 83 per month, which is 10 from Rs 138 per month at present. Percentage is less. In such a situation, even Reliance Group is not going to get much relief from JioPhone Next.
free cash flow negative
Reliance Industries has not been able to maintain its free cash flow generation for the last 15 years. According to the estimates of the brokerage firm, Reliance’s free cash flow may remain negative even further because Reliance Industries has made up its mind to spend a huge amount of 75 thousand crores.
Future retail deal can make a difference
According to the estimates of the brokerage firm, Reliance Group may get some help once the future retail deal is completed. This can increase the revenue of the company by 27%. Reliance Retail’s net revenue is expected to increase from $1100 million to $1800 million by FY2023, $2,500 million by FY2025 and $500 million by FY2030.
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