RIL share price jumps 5% today; check Goldman Sachs, CLSA target prices, upside potential

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Updated: August 04, 2020 12:42 PM

RIL shares were trading at 4.57 per cent higher at Rs 2,100 apiece as compared to a 1.62 per cent rise in S&P BSE Sensex in the noon deals.

RIL, RIL shares, Reliance IndustriesRIL shares have rallied 142 per cent from March lows of Rs 868 apiece. Image: Reuters

Reliance Industries (RIL) share price surged nearly 5 per cent to touch day’s high of Rs 2,092 apiece on BSE, taking the market capitalisation of the firm to nearly Rs 13.23 lakh crore. Mukesh Ambani-led oil to telecom conglomerate reported a 31 per cent on-year jump in consolidated net profit at Rs 13,233 crore in the April-June quarter. The company also posted a one-time gain of Rs 4,966 crore on investment by British oil major BP in its fuel marketing business. At least two foreign brokerages Goldman Sachs and CLSA are bullish on this index heavyweight stock with a potential upside of up to 16 per cent. “We believe RIL’s existing dominance in telecom and offline retail, combined with the online traffic dominance of their partner Facebook, can create the fastest-growing internet platform in India,” Goldman Sachs said in a report. 

The foreign brokerage firm has maintained a ‘buy’ rating to the stock. It will take Reliance Industries shares to jump 15.78 per cent from yesterday’s close to touch the price target of Rs 2,325 apiece pegged by the brokerage firm. It further added that despite weak global oil demand in the first quarter, RIL’s oil to chemical division ran at a 90 per cent utilisation rate versus peers at 60-70% on the back of high complexity of its operations; lower cost structure; and operational flexibility driven by feed, product diversity and high refining integration. “Within E-commerce, we forecast RIL’s online gross merchandise value (GMV) will reach US$35 bn in FY25E with a 31% market share,” it added.

RIL shares have rallied 142 per cent from March lows of Rs 868 apiece. Last week, the stock quoted a 52-week high of Rs 2,198.70 apiece. The stock has been on a gaining spree due to back to back investments from global technology investors in its digital arm Jio Platforms, Rs 53,124 crore mega rights issue and stake sale to British energy giant BP in the petro-retail joint venture. With over Rs 13 lakh crore market capitalisation, RIL is among the top 50 most valued companies globally. It took just eight trading sessions for the company to climb to Rs 13 lakh crore m-cap from Rs 12 lakh crore. The company has become a net debt-free firm nine months ahead of its deadline of March 2021. So far, Reliance Industries has raised Rs 1.52 lakh crore in exchange for a total of 32.8 per cent equity stake sale in Jio Platforms.

Foreign brokerage firm CLSA raised its target price for RIL to Rs 2,250, an upside of 12 per cent. The brokerage firm said that after a 400 per cent rally over the past seven years and over 150 per cent gain in four months, the stock may take a pause. “Its promising long-term story and underweight positioning in institutional portfolios should provide support,” it said in a report. CLSA also said that based on FY20 pure retail revenues of US$12.2bn, Reliance Retail is the clear market leader in the grocery and consumer electronics segments.

RIL shares were trading at 4.57 per cent higher at Rs 2,100 apiece as compared to a 1.62 per cent rise in S&P BSE Sensex in the noon deals. Research and brokerage firm Edelweiss reiterated its ‘hold’ rating to the stock. “We believe RIL’s FAANG-like valuation (particularly Jio’s) is misplaced as O2C and telecom make up 70% of the value,” it said. 

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