The first quarter was quite an unpredictable one. There was an explicit ban on usage of Oxygen for all industrial purposes for most of the quarter, and Reliance had diverted significant amount of oxygen towards battling the second wave. So there was a lot of uncertainty on how much exactly this would have impacted their production and profits.
However - as the numbers point, the results haven’t had any impact whatsoever. The massive inventory gains because of run up in crude prices have more than compensated for any impact from the lockdown!
More importantly, Jio is now firing big time - hitting ₹3500 Crores Net profit in a quarter! And Retail, despite a tough operating environment, has managed almost a ₹1000 Crores profit!
After the AGM, there was some fear that the aggressive capex plans would once again load the company up with debt. That fear is clearly misplaced. A ₹75,000 crore capex plan is insignificant for a company that makes ₹13,000 Crores in a single quarter! That’s yet another worry off the stock’s back!
The JustDial acquisition is also extremely interesting one. Reliance is shifting aggressively to B2C game, and JustDial opens up the B2B2C market also for Reliance. It creates very interesting synergy with Jio and JioMart, as well. Obviously, JustDial will have supercharged growth under Reliance!
The news flow this week about CCI accusing Amazon of fraudulent misrepresentation, is also very positive for Reliance. Amazon is on a sticky wicket - if they pitch for a strong case against Future Retail and Reliance - they now risk a scenario where the CCI can revoke the approval for the original deal between Amazon and Future Retail.
And finally the icing on the cake is the Zomato IPO. Reliance has strung together a massive string of digital pearls, and the excellent performance of Zomato will lead to a valuation boost across all digital businesses. I think there has to be a meaningful increase in Jio Marketcap today, just based on Zomato IPO and Jio’s stellar profits.
However - as the numbers point, the results haven’t had any impact whatsoever. The massive inventory gains because of run up in crude prices have more than compensated for any impact from the lockdown!
More importantly, Jio is now firing big time - hitting ₹3500 Crores Net profit in a quarter! And Retail, despite a tough operating environment, has managed almost a ₹1000 Crores profit!
After the AGM, there was some fear that the aggressive capex plans would once again load the company up with debt. That fear is clearly misplaced. A ₹75,000 crore capex plan is insignificant for a company that makes ₹13,000 Crores in a single quarter! That’s yet another worry off the stock’s back!
The JustDial acquisition is also extremely interesting one. Reliance is shifting aggressively to B2C game, and JustDial opens up the B2B2C market also for Reliance. It creates very interesting synergy with Jio and JioMart, as well. Obviously, JustDial will have supercharged growth under Reliance!
The news flow this week about CCI accusing Amazon of fraudulent misrepresentation, is also very positive for Reliance. Amazon is on a sticky wicket - if they pitch for a strong case against Future Retail and Reliance - they now risk a scenario where the CCI can revoke the approval for the original deal between Amazon and Future Retail.
And finally the icing on the cake is the Zomato IPO. Reliance has strung together a massive string of digital pearls, and the excellent performance of Zomato will lead to a valuation boost across all digital businesses. I think there has to be a meaningful increase in Jio Marketcap today, just based on Zomato IPO and Jio’s stellar profits.