RIL share price hits fresh record high today, stock rallies 57% so far this year; should you buy?

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September 14, 2020 11:00 AM

RIL stock has zoomed 172 per cent from its March low of Rs 868 apiece. Last week, RIL announced that Silver Lake would invest Rs 7,500 crore in its retail arm RRVL

RIL, Reliance IndustriesHSBC maintained a ‘hold’ rating to the stock with a target price of Rs 2,020, which implies 16.8 per cent downside from today’s high. Image: Reuters

RIL share price hit a fresh record high of Rs 2,360 apiece on BSE, soaring 1.77 per cent in the morning deals. With today’s gain in the stock price, the total market capitalisation of the Reliance Industries Ltd stood at Rs 15.82 lakh crore. The stock surpassed its previous high of Rs 2,343.90, touched on September 10. According to media reports, American private equity company Carlyle may invest $1.5-2 billion to buy a stake in Reliance Retail Ventures Ltd (RRVL). Last week, Bloomberg reported that Jeff Bezos-led Amazon is in discussions with Reliance Industries for a 40 per cent stake in RRVL. “RIL has shown the ability to monetize the growth prospects of its digital assets and de-lever its balance sheet, but simultaneously has highlighted plans to expand its reach in new energy and chemicals, and has rolled out its e-commerce platform. As RIL embarks on these growth initiatives, capital allocation will take center stage and drive stock performance,” said Yogesh Patil, Senior Research Analyst at Reliance Securities, told Financial Express Online.

RIL stock has zoomed 172 per cent from its March low of Rs 868 apiece. Last week, RIL announced that Silver Lake would invest Rs 7,500 crore in its retail arm RRVL. “Reliance is on a roll, up by almost 56.74% this year, on the back of making the company debt-free and billions of dollars pouring into its telecom venture Jio. The company bounced back sharply post hitting a low of Rs 864 on 23rd March, enriching its shareholders in the most spectacular way,” Aamar Deo Singh, Head Advisory at Angel Broking, told Financial Express Online.

Moreover, HSBC in its report released last week kept its earnings forecasts unchanged on pending regulatory, credit and shareholder approval. It has maintained a ‘hold’ rating to the stock with a target price of Rs 2,020, which implies 16.8 per cent downside from today’s high.

Also read: Reliance Industries rating: Hold — Deal could start off another round of investments

Around 10.30 AM, RIL shares were trading 0.91 per cent up at Rs 2,340 apiece as compared to a 0.82 per cent rise in the S&P BSE Sensex. “Earlier the stock price surged due to fundraising in its Jio business which was seen as gaining in value, now the same is happening in its retail business. The recent deals are seen as value unlocking by RIL,” Narendra Solanki, Head – Equity Research (Fundamental), Anand Rathi Shares and Stock Brokers, told Financial Express Online.

The oil-to-telecom conglomerate, Reliance Industries has also become the first Indian company to hit a market capitalisation of $200 billion. Foreign brokerage CLSA maintained an ‘outperform’ rating to the stock, saying that RIL has largely exhausted its large near-term inorganic triggers even as organic earnings may struggle to deliver any big surprises in the current environment.

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