Reliance Industries share price surges 5% after Morgan Stanley ups earnings forecast

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Updated: September 24, 2019 11:38 AM

Shares of billionaire Mukesh Ambani-led Reliance Industries surged on Tuesday morning after global firm Morgan Stanley raised earnings forecast.

Reliance Industries, BP plc, Niko Resources, KG-D6 block, Bay of Bengal, Dhirubhai-1, R-Cluster, Satellite ClusterReliance Industries share price gained more than 4.8% to hit the day’s high at Rs 1,298.55 on BSE.

Shares of billionaire Mukesh Ambani-led Reliance Industries surged on Tuesday morning after global firm Morgan Stanley raised earnings forecast. Reliance Industries share price gained more than 4.8% to hit the day’s high at Rs 1,298.55 on BSE. According to Morgan Stanley, the lower corporate taxes and cheaper gas feed costs should de-risk outlook. Morgan Stanley noted that there is increasing investor confidence in earnings delivery. The firm sees an earnings CAGR of 17% over FY19-21. The firm has raised earnings forecasts by 7 percent and 12 percent for FY20/F21.

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Morgan Stanley has an overweight rating on the shares with a target price of Rs 1,469. The target price implies an upside of more than 13% from the current market prices. Given the 2-day rise in share prices, Reliance Industries has reclaimed the spot of India’s most valued firm with a market capitalisation of Rs 8.20 lakh crore. IT giant TCS is in the second spot with a value of Rs 7.7 lakh crore. Last week, Mukesh Ambani had raised promoter stake in  Reliance Industries by 2.71% to 48.87%, according to regulatory filing. Reliance Services and Holdings Ltd, controlled by promoter group firm Petroleum Trust, acquired 17.18 crore or 2.71 per cent stake in Reliance on September 13, the firm said. As at the end of June, Mukesh Ambani and his private firms held 47.29% stake in RIL.

In the Apr-Jun quarter, Reliance Industries recorded a 6.8% on-year rise in profit at Rs  10,104 crore as against Rs 9,459 crore in the corresponding quarter last fiscal year, beating street estimates. The retail-arm of Reliance Industries reported a total income of Rs 1,30,556 crore for 2018-19, 89% more than the previous year’s Rs 69,198 crore, the company said on Thursday. “During FY18-19, we achieved several milestones and made significant strides in building Reliance of the future. Reliance Retail crossed Rs 1,00,000-crore revenue milestone,” Mukesh Ambani, chairman of RIL said.

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