CMP: 90


Reliance Communications Ltd. offers integrated telephone services. The Company offers fixed line and wireless voice, data and video transmission services, and Internet access.

Most investors get fooled by brand name and the fact that Reliance Communications has taken a fall from 800 levels to sub 100 levels and blindly believe it can go back to previous levels. In fact it could take further fall or be sluggish and could hurt more. Liabilities weigh heavily and has made heavy losses of 490 Crores, 476 Crores and 364 Crores in the last 3 quarters. Even if it turns back to 2008 peak profits (Which is near impossible), it will still trade at a P/E of 8 at current price of 90. Dont get trapped in. It can spike, but it wont rally and downside risk is too huge in the long run. Its a strong AVOID like Suzlon.