BSE
720.70
6.60 (0.92%)
Vol:957397 shares traded
NSE
721.25
5.35 (0.75%)
Vol:6387716 shares traded
MUMBAI: Reliance Industries Chairman Mukesh Ambani said the conglomerate will invest Rs 1 lakh crore in five years to double operating profit from a more diversified operation, but his pledge did little to reassure impatient investors who want faster growth in earnings and better returns from the company's languishing shares.
Reliance, the only business group with ambitious investment plans in a period of slow growth and policy uncertainty, sees its retail business taking centre stage in the conglomerate's operations and becoming an engine of growth along with oil & gas, refining and petrochemicals, Ambani told the annual general meeting of shareholders on Thursday.
While Ambani was upbeat about the company's fundamentals and future growth, investors and equity analysts have raised concerns about the outlook in times of global economic turmoil, fall in gas production and the group's disputes with the oil ministry. Ambani, accompanied by mother Kokilaben, wife Nita, sons Aakash and Anant, and daughter Isha at the annual general meeting, struck an emotional chord in his concluding remarks when he addressed shareholder concerns about the outlook.
"If we had listened to sceptics, we would still be only a textile company," he said, bringing back memories of legendary founder Dhirubhai Ambani, under whose leadership the company and its investors made handsome gains.
RIL's gas output, which has fallen below 35 million metric standard cubic metres a day, will rise to 60 mmscmd in 3-4 years while revenues from retail will see a six-fold jump to Rs 50,000 crore, said Ambani. He also said RIL's broadband wireless plans, currently being finalised, would be a "significant value creator" for the firm and its shareholders.
Analysts said the thrust on new businesses, to some extent, reflects Reliance's frustration with its core business of oil & gas, which has suffered in recent years as natural gas output from its KG-D6 block has halved, prompting the oil ministry to financially penalise the company.
Reliance's dispute with the government, which has adopted a stern approach towards the company, has hurt investor sentiment, and its shares have risen barely 4.4% this year, trailing the 7% rise in the Sensex.
No Short-Term Gains in Oil and Gas Business
On Thursday, RIL shares rose 0.75%, again lagging the 1.2% rise in the benchmark index.
Ambani did not signal any short-term gains in the oil & gas business, in which global major BP is now a partner, but he reaffirmed its strategic importance.
