``We maintain our outperform/buy recommendation, believing that the management will work towards enhancement of shareholder value by profitable deployment of its cash accruals in the future,'' it said in a research report.

It said RIL may capture the value of its growth companies either by the equity method of accounting or consolidation. ``A 50 per cent holding in Reliance Petroleum may give RIL an additional Rs 10 billion profit in 2000/01,'' it said.

``The company is still trading at a price to earnings ratio of 13.3 times fiscal 2001 (Financial year 2000/01 estimated) earnings and 8.2 times FY2001 earnings before interest, tax, depreciation and amortisation,'' it said.

This, the report said, was still at a 10 per cent discount to market price to earnings ratio. Inclusive of RPL's profit, the discount to market worked out to 35 per cent, it said.

``We believe the management's re-rating will ensure that RIL's rating at least matches the market multiple,'' it said. ``Assuming a 50 per cent upside for the market in the next twelve months, we arrive at a target price of Rs 662,'' it said.

In Tuesday morning deals, RIL was trading at Rs 322 on the Bombay Stock Exchange. In a separate report, released earlier, Goldman Sachs Investment Research said it had raised its target price for Reliance to Rs 400.

``Our investment is based on solid fundamentals, 22 per cent earnings growth, large free cash generation and attractive valuation, remained unchanged, but is strengthened by the value of investments,'' it said.A meaningful portion of this value come from Reliance's holding in its refining unit Reliance Petroleum, it said.

SSKI said the commissioning of RIL's petrochemicals complex at Jamnagar in Gujarat will see higher volume growth and margin expansion due to backward integration, in the polyster chain in fiscal 2000-01 (April-March).

It also said since Reliance was an integrated firm, it would benefit from rising prices of polysters and intermediates. Also in the company's favour were the plans for listing on the New York Stock Exchange which will entail division-wise reporting in the annual accounts, it said.

SSKI said the company's active consideration of high-growth service sectors, including media, software and Internet telephony, where its large cash balance could help, would also help a further re-rating of the stock from the current levels.