2018 holds better prospects for RIL

Subscriber additions, expansions have translated into earnings upgrades

The Reliance Industries (RIL) stock has been one of the biggest gainers in 2017, adding 68 per cent to shareholder wealth, led by positive surprises in the telecom business (Reliance Jio) and strong performance in the core refining and petrochemicals businesses.

A recent trigger has been the acquisition of fibre, tower and spectrum assets of Reliance Communications (RCom) for an estimated Rs 250 billion. Though the deal will raise RIL’s debt, it will get substantial benefits in terms of lower costs, expansion of 4G coverage and higher synergies. While RIL will save about Rs 15-16 billion in annual rental cost