Reliance Results seemingly positive - with large profit. However if you remove One time gains and tax related gains, it’s about ₹2000 crores BELOW expectations!
As predicted, Retail took a massive hit - and so did Oil and PetChem businesses. Jio did OK in revenue terms, but profit was below expectations.
All said, clearly, non-Jio businesses are nowhere near what the market is ascribing in terms of value. And Reliance can’t sustain these crazy valuations.
Expect a down move in the stock tomorrow.
As predicted, Retail took a massive hit - and so did Oil and PetChem businesses. Jio did OK in revenue terms, but profit was below expectations.
All said, clearly, non-Jio businesses are nowhere near what the market is ascribing in terms of value. And Reliance can’t sustain these crazy valuations.
Expect a down move in the stock tomorrow.
another article on JIO and why it's not tech firm
https://plus91.substack.com/p/4-reasons-jio-remains-a-telco
https://plus91.substack.com/p/4-reasons-jio-remains-a-telco
Bhai log, all the points mentioned in the thread definitely makes sense. But please do not forget what happened to the Reliance Short Sellers during the last few months. Here is a video of the guy who shorted Reliance based on all the logical reasons, just as given here. Please try to feel the emotions that this guy is going through! Once he shorted, Reliance never looked back and it just kept on going up and up! So Beware!
Some observations over the weekend.
The stock price had doubled since FB announcement and about 1.8x from the rights issue price. Some part of this was due to the "debt-free" announcement in Sep19 (when it already went up 30%). It was also is in anticipation of jio doing well. It did do well. But it currently contributes only 1/6 of RIL's current revenue, which is already a low base because of about 45% drop QoQ. For the current price to be sustainable, it has to sustain its revenue growth rate of 30% shown this time. There could also be a small risk from reducing data consumption as and when things normalize (most likely at the end of Q3).
The stock price had doubled since FB announcement and about 1.8x from the rights issue price. Some part of this was due to the "debt-free" announcement in Sep19 (when it already went up 30%). It was also is in anticipation of jio doing well. It did do well. But it currently contributes only 1/6 of RIL's current revenue, which is already a low base because of about 45% drop QoQ. For the current price to be sustainable, it has to sustain its revenue growth rate of 30% shown this time. There could also be a small risk from reducing data consumption as and when things normalize (most likely at the end of Q3).
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