Wednesday, September 15, 2010


Reliance Industries

Reco Price: Rs 958,
Target Price: Rs 1,260

RIL’s stock price has borne the brunt of negative news flows on account of slower ramp-up of KG Basin gas, subdued refining and petrochemical margins and concerns over the redeployment of the cash flows. However, the current price has discounted the worst case scenario. Brokerages expect RIL’s profitability to register 34 per cent CAGR over 2010-12 driven by improvement in refining margins coupled with ramp up of oil and gas production at the KG Basin. Higher share of E&P in the profit matrix will reduce exposure to cyclical segments. RIL's newer ventures (shale gas, Broadband and power) will keep it on high growth orbit going ahead. The stock is relatively under-valued trading at 1.7x 2011-12 P/BV. Maintain buy.

—Angel broking


No comments: