Reliance Industries shares surge to fresh all-time high; should you buy or sell stock?

Reliance Industries shares: Billionaire Mukesh Ambani-led Reliance Industries’ share price is trading near all-time levels, up by more than 1.8%. Notably, the recent rally in the shares of Reliance Industries led to the firm achieving another milestone yesterday, topping the $100 billion mark in market capitalisation.

Reliance Industries shares zoomed to an intra-day high of Rs 1,103.95, up by nearly 1.8% on Friday. Notably, the shares surged by nearly 6% yesterday, taking its market capitalization to 6.87 lakh crore, or $100 billion, converted at the current USD/INR rate of 67.82.

Earlier, the oil and gas-to-telecom behemoth had first crossed the $100-billion market-cap mark in October 2007. Despite such a huge rally, global research and brokerage firm Goldman Sachs sees more than 25% upside on the shares.

The firm has a Buy call on the stock with a target price of Rs 1,340 per share. The firm expects Q1 EBITDA to grow 45 percent YoY (up 2 percent QoQ). “Refining margin may sequentially decline but is set for expansion in coming quarters,” noted Goldman Sachs. According to the report, the ramp-up of petcoke gasification project will boost GRM by $2 per barrel in Q4 and IMO 2020 Sulphur Regulations will drive GRMs higher from Q2FY20. “Peak GRM potential will be seen at $18-19 per barrel in CY2020, said the firm.

In the quarter ended March 2018, Reliance’s GRM, a gauge for regional refining margins for the year was at a 9-year high of $11.6/bbl as against $11/bbl in the previous year. Gross Refining Margin is the difference between the cost of crude oil and the average selling price of refined products.

The rally in the shares comes on the back of a surge in the stocks of oil marketing companies, buoyed by a slump in global crude oil prices. Reliance Industries, with its market capitalisation at Rs 6.86 lakh crore is now India’s second most valued firm, after TCS (Tata Consultancy Services). RIL shares have risen by nearly 22% since January-18.

Reliance Industries Limited (RIL)