At Reliance AGM, Jio financials, 4G feature phone would be the focus

Street to also watch for details on home-to-fibre, fuel and organised retail segments

In September last year, Reliance Industries (RIL) Chairman Mukesh Ambani shared the roll-out plan for Reliance Jio’s telecom services at the company’s annual general meeting (AGM). This Friday, shareholders and investors will look for details on revenue generation from these services.

RIL is slated to announce its earnings for the April-June quarter (Q1) on Thursday and hold its AGM the day after. Analysts expect the focus, both in terms of the June quarter numbers and the AGM, would be on the company’s telecom business.

The details are important and will reflect on investor sentiment, which is on the rise. On Friday, the RIL stock scaled to a nine-year high.

Company News : While Jio started offering its services in September last year, these services have largely been provided free till March and continue to be offered at discounted prices. Among other details, analysts and shareholders would look for data on revenue generation and the profitability timeline for this business. “Telecom would be the topmost thing to watch, as details on other business like the oil and gas segment have been already spelled out,” said an analyst with a domestic brokerage firm.

Last week, the company extended its promo offers for Jio services, adding to scepticism on any meaningful revenue addition in the current financial year. “We see downside risk to our Jio financial year 2017-18 revenue estimate of $2.7 billion, due to extension of the promotional offers. We are unsure if our FY18 revenue estimate for Jio holds any weight, given that Jio has been capitalising its revenue/expenses thus far,” a Morgan Stanley report dated July 11, said.

In addition to financial details, analysts and investors will look out for official comments on plans for low-cost 4G phones. “While every AGM has the usual expectations on bonus issue (the previous bonus issue was in FY 2009-10), expectations this time are high on another large announcement in telecom, especially 4G feature phones,” analysts with JPMorgan wrote in a report dated July 12. Read more