However, the company's balance sheet will be stronger in a year, Srikanth said, as its investment goes down and it transfers its fiber and tower undertakings to separate companies.
Reliance
Industries Ltd.’s plan to strengthen its balance sheet will
hinge on future capital spending as credit market participants zero
in on whether the company will be able to slow those outlays over the
next year.
The
conglomerate has invested about $64 billion across telecom and retail
as well as petrochemicals and oil refining expansions, Joint CFO V.
Srikanth said during last week’s earnings briefing.
Reliance
will probably continue to spend to build capacities in its telecom
business as well as on its e-commerce
and broadband operations, according to Nitin Tiwari, an analyst with
Antique Stock Broking Ltd.
While
petrochemicals has been a key driver for the group’s earnings,
contributing about half of total operating profit, shrinking profits
from converting dirty residual oil into cleaner light fuel pose a
headache.
However,
the company’s balance sheet will be stronger in a year, Srikanth
said, as its investment goes down and it transfers its fiber and
tower undertakings to separate companies.
Spending
on telecom unit Reliance Jio Infocomm Ltd. and rising debt have been
“a key worry, and monetization of tower/fiber could allay this,”
wrote Mumbai-based Anil Sharma and Ravi Adukia, analysts at Nomura
Holdings Inc.
No comments:
Post a Comment