Comments
JP Morgan Chase’s analysts have warned that a delay in executing the deal with Future Group would impact Reliance Retail's EBIDTA by 2 per cent for FY22 and the Future Value of the Mumbai Ambani owned Retail giant by 5 per cent.
Days after Reliance Retail posted its operational performance in Q2 JP Morgan Chase has said that Reliance Retail has posed an “impressive q2 result” with flat revenue y-o-y basis and “significantly better-than-expected EBITDA.” Reliance Retail’s EBITDA jumped to ₹2,006 crore which was higher by 85.9 per cent than the previous quarter.
However, just when analysts started to see some green shoots on the post-Covid road to recovery for Reliance Retail, market watchers have now warned that this could pose as a hindrance on the EBIDTA estimates of Reliance Retail for the FY22. “There are potential legal challenges to the future Retail asset acquisition. We currently build the acquisition into our FY22 estimates. While any delay in closing the deal would impact our FY22 EBITDA estimates by only 2 per cent, it would impact our FV by 5 per cent,” said analysts in their note.
Earlier this year, Reliance Retail invested nearly ₹25,000 crore in the multiple companies of the debt-strapped Future Group. Future Group’s partner Amazon had dragged the company to the Singapore International Arbitration Court (SIAC) over alleged breach of contract on multiple grounds.
Related Stories
‘Amazon refused Future offer to recompense in case of pact breach’
But the American firm rejected the proposal, reveal documentsThe SIAC had passed an interim stay on the deal between Future Group and Reliance Retail in favour of the American giant. On one hand, on the basis of this stay order, Amazon has written a letter to the Exchanges and SEBI, on the other, Reliance Retail and Future Group have said they will go ahead with the deal without any delay.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.