Payback time for Reliance: Market capitalisation touches Rs 5 lakh crore

Reliance Industries’ (RIL’s) market capitalisation touched Rs 5 lakh crore, becoming the first listed stock to do so after Tata Consultancy Services (TCS) scaled that peak three years ago. The RIL stock, which has been hitting its multi-year highs consistently within recent times and is in touching distance of its all-time high levels of Rs 1,625, has gained 50 per cent over the past six months. The bullish sentiment rests on expectations that its investments both in its telecom venture (Reliance Jio) as well refining and petrochemicals will start delivering. With some of these projects being commissioned in FY17 and some to be rolled out in FY18, earnings growth will jump sharply in FY19.  Nifty Trading Tips

Analysts say it is payback time for the mega entity. And analysts at JP Morgan say that de-leveraging will kick in as large project spending ($48 billion) across refining, petchem and telecom comes to an end, with the company entering a free flow generation period. They say that de-leveraging from here would depend heavily on the revenue build-up of Reliance Jio. Moreover, the gasifier and refinery off-gas cracker (ROGC), which relates to the core refining and petchem business, are important, given the spend ($18 billion on core projects) for operating profit improvement from FY18 on. Future & Option Trading Tips