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Reliance share price may rally 20% on strong telecom, retail performance; Price target raised

Reliance Industries (RIL) share price gained over 1 per cent to Rs 2,565 apiece (day’s high) on BSE, capping the BSE Sensex losses in Wednesday’s trade.

Reliance share price may rally 20% on strong telecom, retail performance; Price target raised
So far in the year, Reliance Industries share price has added 6.13 per cent, and 22.2 per cent in the last one year, outperforming the BSE Sensex.

Reliance Industries (RIL) share price gained over 1 per cent to Rs 2,565 apiece (day’s high) on BSE, capping the BSE Sensex losses in Wednesday’s trade. Benchmarks indices fell in the second half of the trade, after trading mostly in green in the morning session. BSE Sensex was trading in red, falling below 58000-mark, while NSE Nifty 50 gave up 17400. Research firm Prabhudas Lilladher is bullish on the RIL stock, and has even revised its price target upward. The firm expects a 20 per cent rally in the stock price, from the last close, with a target price pegged at Rs 3,045 apiece (from Rs 2,955 earlier).

Analysts at Prabhudas Lilladher said that low product inventory and strong demand has pushed oil product spreads, which will benefit complex refiners like RIL. “We expect RIL’s telecom and retail segment performance to remain strong on back of flow through of tariff hikes and opening of stores,” they added. Moreover, Mukesh Ambani’s oil to telecom conglomerate remains one of Prabhudas Lilladher’s preferred picks with play on strength across its business verticals.

So far in the year, Reliance Industries share price has added 6.13 per cent, and 22.2 per cent in the last one year, outperforming the BSE Sensex. The 30-share index has fallen 2.4 per cent on a year-to-date basis, but gained 15.37 per cent in the past one year. Earlier this week, RIL’s retail arm, Reliance Retail Ventures Ltd (RRVL) announced the acquisition of a majority 89 per cent equity stake in Purple Panda Fashions Pvt Ltd, which owns and operates the Clovia business, through a combination of secondary stake purchase and primary investment, for Rs 950 crore.

The research firm, in its report, noted that gross refining margins have been strong due to low inventory levels along with disruptions in product supplies, due to ongoing geopolitical tensions, which will drive RIL’s hydrocarbon earnings. It also believes that tariff hikes along with higher operating rates for stores post pandemic will also boost telecom and retail profits.

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First published on: 23-03-2022 at 03:58:43 pm