Reliance Industries nears 52-week high

Shares of Reliance Industries (RIL) moved higher by 3% to Rs 1,055 on the National Stock Exchange (NSE), is less than 2% away from its 52-week high of Rs 1,068 touched on July 23 last year in intra-day trade.

At 11:03 a.m. the Nifty 50 index was down 1% at 7,549 after hitting a 52-week low of 7,494 in early morning trade on the NSE.

The stock of RIL outperformed the market gaining 6% in past one week compared to the 3.3% decline in the Nifty 50.

Analyst at Sharekhan sees strong earnings traction in case of RIL, backed by an improvement in its gross refining margins (GRM) and the benefit of capex incurred in the petrochemical and refining businesses.

“We expect RIL to earn a premium of around $3 per barrel over Singapore GRM taking the Q3FY2016 GRM to $11 per barrel from $10.6 per barrel in Q2FY2016. The capacity addition in the high-margin petrochemical business would further boost the profitability,” the broking firm said in a Q3FY2016 earnings preview.

According to Business Standard reports, CLSA believes the RIL’s earnings before interest, tax, depreciation and amortisation (Ebitda) should rise 50% in the next two years to $10 billion on the back of downstream expansion.

The brokerage has a strong buy rating on RIL and believes 2016 will be a watershed year for the company, as projects worth $30 billion will be commissioned across various businesses.

Reliance Industries Limited (RIL)