Are threats for Reliance from Israel-Hamas war & likely Disney’s India asset buy too strong?

Reliance Industries’ credit metrics may worsen somewhat in the second half of this fiscal year, as higher oil prices due to the Israel-Hamas war will affect O2C margins while the oil-to-OTT conglomerate may finalise the mega acquisition of Disney’s India media assets as early as next month, according to CreditSights.

“We expect Reliance’s credit metrics to worsen slightly through F2H24 as weaker O2C margins, sizable organic capex (telecom, retail, renewables), and a large potential acquisition of Disney’s India media assets may outweigh continued strong EBITDA generation from the telecom and retail businesses,” CreditSights, a Fitch-owned agency, wrote in a note.