Credit Suisse downgrades RIL to underperform, reduces target price

The report pointed out that RIL's free cashflow (FCF) has been in negative for six years

Credit Suisse has downgraded Reliance Industries (RIL) from neutral to underperform, on the back of higher liabilities and slow enterprise roll-out for the telecom business. The brokerage reduced its target price for the company to Rs 995 per share from Rs 1,350 apiece.

“Our target price cut factors in higher liabilities of $10 billion from crude payables, JioPhone financing and East West Pipeline, multiple cuts and lower earnings for refining, and slow enterprise roll-out and weak Jio ARPU in the first quarter,” analysts with Credit Suisse said in the August 5 dated report. ARPU is average revenue per user.

The report pointed