1. Reliance Industries shares soar, but Jio may not be the factor today; Petrochem biz in play

Reliance Industries shares soar, but Jio may not be the factor today; Petrochem biz in play

Reliance Industries shares surged in trade today after the company announced successful commissioning of the second and final phase of its Para-xylene unit at its Jamnagar complex, which will double the company’s PX processing capacity.

By: | Published: April 21, 2017 12:57 PM
RIL shares were up 3.5% at Rs 1,417.4 on NSE, trading close to its about-nine-year high of Rs 1,448.5. It was the top gainer on the NSE Nifty, contributing to over 22% of the benchmark index gains.

Reliance Industries shares surged in trade today after the company announced successful commissioning of the second and final phase of its Para-xylene unit at its Jamnagar complex, which will double the company’s PX processing capacity.

RIL shares were up 3.5% at Rs 1,417.4 on NSE, trading close to its about-nine-year high of Rs 1,448.5. It was the top gainer on the NSE Nifty, contributing to over 22% of the benchmark index gains.

Reliance Industries said in a statement yesterday evening that with the commissioning of its latest unit, the company would become the world’s second largest producer of PX with about 11% of global production.

Further, the company said it is executing major projects in its energy and materials chain at Jamnagar covering Para-Xylene, Cracker complex along with downstream plants and Gasification. “These projects will add significant value to Reliance’s Refining & Petrochemical business and enable Jamnagar complex to achieve energy self-sufficiency. The benefits of integration at the Jamnagar complex will set a new paradigm of scale and value addition in the Refining and Petrochemicals industry,” RIL said in the statement.

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Reliance Industries’ shares are on a sustained rise on the prospects of fresh incomes from its petrochemicals and refining business’ under-commissioning facilities, and cash flows from its telecom business, which had seen heavy investments so far.

Global brokerage CLSA recently raised the target price on Reliance Industries’ shares to Rs 1,500 from Rs 1,350. CLSA maintained its ‘buy’ rating on the stock. It cited optimistic commentary by the company management on its telecom venture Reliance Jio, while also raising the valuation multiple on the refining business. Reliance Jio Infocomm has now started charging money from consumers for using its mobile telephony services, which it was offering so far for free.

Jal Irani, Senior VP at Edelweiss Capital Services, had also recently said that Reliance Industries is also expected benefit a lot in the near future as the company’s projects under commissioning will significantly add to free cash flows. “There are $40 billion worth of projects in commissioning phase, which doubles their (RIL’s) productive assets,” Irani said, adding, “We forecast RIL’s free cash flows to rocket from next year as the quarterly capex trend is plummeting.”

RIL said yesterday that its various facilities, including Para-Xylene, Cracker and downstream projects (MEG, Linear Low-density and Low-density Polyethylene) as well as Gasification which is linked to RIL’s DTA refinery, have now been installed, mechanically complete and are in various stages of pre-commissioning and commissioning.

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