Business Today

Unreal Expectations

Mukesh Ambani has invested close to Rs 2.35 lakh crore in building assets to make Reliance Jio's digital business vertical on a par with refining or petrochemicals.
twitter-logo Nevin John   New Delhi     Print Edition: February 25, 2018
Unreal Expectations

Mukesh Ambani has invested close to Rs 2.35 lakh crore in building assets to make Reliance Jio's digital business vertical on a par with refining or petrochemicals. The question, however, is whether Jio can deliver the sizeable cash flow that its sister businesses do? In the quarter ended December 2017, the refining business posted a profit before interest and tax of Rs 6,165 crore and the petrochemical vertical Rs 5,753 crore.

Despite building up a subscriber base of 160 million and posting a whopping 38.2 per cent EBITDA margin, Jio showed a PBIT of merely `1,440 crore. Experts say even with double this subscriber figure, Jio won't be able to generate a PBIT exceeding `3,000 crore. Jio posted its first quarterly net profit of `504 crore in the third quarter. Because of the battle over tariffs in the telecom market, taking the net profit to `1,000 crore seems to be difficult, say experts.

By Nevin John

 

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