View on Reliance and Jindal Steel & Power

Reliance Industries

Reliance is the third most profitable company in India, and the second largest company in India as measured by revenue after the government-controlled Indian Oil Corporation. Life Insurance Corporation of India is the largest non-promoter investor in the company with 7.98% shareholding.

Reliance Retail

Reliance Retail (subsidiary of RIL), is the largest retailer in India. Few large brands like Reliance Fresh, Reliance Digital and Reliance Trends come under the Reliance Retail brand. It focuses on consumer goods, consumer durables, travel services, energy, entertainment and leisure, and health and well-being products, as well as on educational products and services. Its annual revenue for the financial year 2015–16 was Rs.216 billion.

Reliance Jio

Reliance Jio Infocomm Limited, also known as Reliance Jio is a leading wireless 4G LTE service provider in India. On 22 Feb, Jio announced that it had acquired 100 million subscribers. With investment of over 150,000 crore, Jio will provide paid services to their customer’s from April onwards. Jio has already made competition in telecom segment at new level. This has been affected all the telecom companies. But the positive thing in this competition is that the problem of call-drop is going to be finish. Reliance com has already shown her plan for making a combined entity of Aircel, MTS, Rcom. This will provide to combined entity having spectrum in all 22 circles.

Idea and Vodafone are also working on their plan of working together so that they would also have spectrum in all 22 circles. And last Airtel has decided to acquire telenor business of India. This deal of Airtel would help him to operate in all 22 circles. However, Jio doesn’t need to buy or merge their business with any other telecom company because they have already managed about how they can operate in all telecom circles of India. Although, Interesting part of April would definitely be close watch of Jio’s Revenue. If minimum 40 percent customers start using Jio paid services. Then we can expect that Jio would become a company of 8,000 crore turnover quarterly from their retail business.

LYF, a mobile brand having main aim of providing 4G devices at a cost of accessible to all.  It is a subsidiary of Reliance Retail, the consumer electronics arm of Reliance Industries Limited. TV18, a media company is also now a part of Reliance Industries.

Volatility in Reliance Stock

Oil and Gas business of Reliance is also working well with inline stable growth. For Q3 2017, Company said that their total debt increased from Rs.1,89,132 crore to Rs.1,94,381 crore due to higher investment on Jio Brand. However, we saw a sharp rise in Reliance Stock during end of Feb after Jio announcement that it will now provide Paid services to its customers. The sharp rise in the stock was mainly because of growing business across all subsidiaries which was not been reflected in stock for last 4 years. Although from present levels, Reliance stock can give even 15 percent more return in short-term. Market Capital of Company has not reach as much as was expected to grew. One who holds Reliance or want to buy stock of RIL can buy for target of Rs.1420.

Jindal Steel & Power Limited

JSPL or Jindal Steel & Power Limited is a leading Steel and Power company in india. It produces Steel and Power through backward integration from its own captive coal and iron-ore mines. JSPL is a part of multi-billion diversified Jindal Group. The company manufactures and sells sponge iron, mild steel slabs, ferro chrome, iron ore, mild steel, structural, hot rolled plates and coils. Company also have business in Oil and Gas and Infrastructure segment. JSPL operates the largest coal-based sponge iron plant in the world and has an installed capacity of 3 MTPA (million tonnes per annum) of steel at Raigarh in Chhattisgarh.

In Australia, the company is investing in greenfield and brownfield resource sector companies and projects to supplement its planned steel and power projects in India and abroad. In Indonesia, the company has invested on the development of two greenfield exploration assets.

Even now after grown metal prices and anti-Dumping duty, JSPL has posted a big loss in Q3. But the positive thing is that the company has Quality Assets. Future of JSPL seems to be good because company is working on their expansion in India as well as in other foreign countries. Sharp rise that we saw in stock during February was because of growing interest of investors in Metal Sector. Evaluating from present market condition and Fundamental’s of company, i have a maximum target of Rs.142 for JSPL stock. But if metal sector continue to rise, then we can see levels of Rs.168 in stock.

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