Retaining its "buy" recommendation on the Reliance Industries (RIL) stock, global brokerage firm CLSA on Wednesday said RIL is likely to turn cash flow-positive this fiscal by reaping benefits of its downstream expansion and expects the company to monetise its Jio telecom network.
During 2017-18, the Mukesh Ambani-led RIL was expected to end a four-year run of negative cash flows and report a consolidated free cash flow of nearly $1 billion, according to the Hong Kong-headquartered CLSA.
"This year will see a big cash-flow boost as projects of over $40 billion start to deliver in full swing while capex falls.
"Stabilisation of ROGC (refinery off-gas cracker) and petcoke gasification would boost Ebitda (earning before interest, taxes, depreciation and amortisation)," said the CLSA research report.
According to the brokerage, monetisation of the ROGC complex, coupled with the petcoke gasification plant, which is in an advanced stage of commissioning, will boost the Ebitda, or operating income, of the company.
However, RIL "should allow almost a full year of benefit to flow in fiscal 2018-19. Stabilisation of these projects would give a big boost to oil and gas earnings over 12-15 months", the report said.
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