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Wednesday, October 27, 2021

Share of Reliance Industries at record levels, will this boom be sustainable!

RIL has seen strong buying after 2 big investments in Green Energy. The company’s subsidiary has bought REC SOLAR HOLDINGS for 77 crore DOLLER. The company will also buy 40 per cent stake in STERLING-WILSON. Shares of S&W SOLAR have also jumped 8 per cent today. In this morning’s trading, shares of Reliance Industries ran up about 2 percent on the NSE. In today’s trading, this stock also hit its new 52-week high.

The shares of RIL have gained about 11 per cent during the last one month. At the same time, Nifty 50 has seen an increase of 3.5 percent in the same period. Probal Sen of Centrum Broking It says that amidst the prospects of growth in the energy business of the company, this stock has seen an increase of Rs 200-300 per share in the last one month. These new agreements from the company will provide technology for the company’s four proposed giga factories.

Not only this, the company’s other businesses are also seeing good growth. The refining margin of the refining business of the company’s petrochemical business has seen a rise. Benchmark Singapore gross refining margin (GRM) has increased to $ 3.8 per barrel in the September quarter from $ 2.1 per barrel in the June quarter. The company’s GRM is also showing strength in the current December quarter. Due to this, the margins of the company’s petrochem business have remained strong.

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Jefferies India It says that if China sticks to its climate goal till the Winter Olympics to be held in February 2022, then RIL’s O2C business may see an increase of 10-12 per cent in Ebitda estimates for FY 2022.

Along with strong subscriber additions, the company’s telecom business figures are also expected to strengthen in the September quarter. Along with this, there is a lot of enthusiasm about the retail business of the company. In a nutshell, with the rapid pace of vaccination and the gradual opening up of the economy, all the retailers will see a growth in their business and RIL will be no exception. Recently Reliance Retail Ventures has also entered into a master-franchise agreement with 7-Eleven, Inc.

In view of the improving business conditions Kotak Institutional Equities has increased the SoTP (sum of the parts) based fair value of RIL shares from Rs 2,260 to Rs 2,800.

Investors should also note that despite the recent outperformance, the shares of RIL have traded weaker than Nifty 50 in the last one year. Currently, this stock is seen around Rs 2,684. If we look at the target given by Kotak for this stock, then from here only limited growth is expected in this stock.

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Kotak In a recent report, the company has said that investors should keep an eye on the possible tariff hike in the telecom sector. Apart from this, the progress on the company’s possible deal with Saudi Aramco also needs to be monitored. Apart from this, it is also to be seen how the company’s renewable energy business progresses.

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Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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