Shares of Mukesh Ambani-led Reliance Industries Ltd on Wednesday closed at a two month low, with falling for third sessions, tracking a fall in the local equity markets.
RIL closed at Rs1299.45 a share, down 3.35% from its previous close, while India’s benchmark Sensex Index fell 1.27% to 37,789.13 points. Since 3 May, RIL has fallen 7.65%. Local equity markets fell for 6th sessions with dropping nearly 3% due to renewed trade war concerns.
Investors are worries due to RIL's rising debt, weak gross refining margin and a recent positive earnings from Bharti Airtel.
RIL's refining margin narrowed to a 17-quarter low at $8.2 a barrel in March quarter. Since launch of RJio debt of the RIL increasing continuously due to higher capex. It’s debt outstanding as on 31 March rose to ₹2.87 trillion from ₹2.18 trillion at the end of the previous year.
On Monday, Bharti Airtel delivered better-than-expected revenue performance, led by healthy revenue growth of 4.3% quarter on quarter in India wireless business. EBITDA margin of the company improved by 145 basis points q-o-q to 32.2% in March quarter.
"We believe Bharti is moving in the right direction with aggressive 4G rollouts, partnerships, balance sheet strengthening etc. Bharti’s cash war chest is likely to increase by ₹500-550bn in FY20. This should provide it ammunition to combat competition. Persistent cash burn may compel Jio to relook its aggressive pricing stance. This is key trigger and likely", said Himanshu Shah, Analyst, HDFC Securities in a 7 May note.
Reliance Jio net profit largely remained flat quarter-on-quarter at Rs840 crore and average revenue per user declined to Rs126 per subscriber per month.