Reliance Industries nears 52-week high

Reliance Industries (RIL) was up 2.2% at Rs 1,089, extending its Thursday’s 2% gain on the BSE. The stock is currently trading close to its 52-week high of Rs 1,090 touched on January 15, 2016 in intra-day trade.

In past two-weeks, the stock has outperformed the market by gaining 7.5% as compared to 0.72% rise in the Nifty 50 index.

Mukesh Ambani, chairman of RIL on September 01 announced the launch of Reliance Jio from September 05 with an aggressive pricing structure. Reliance Jio Infocomm is a subsidiary of RIL.

Religare Institutional Research maintains ‘buy’ rating on the stock with target price of Rs 1,200 in next one year.

“RIL’s US$ 21 billion investment in Reliance Jio (around 25% of balance sheet) over the last six years has hobbled stock performance. But considering the 30% CAGR in core earnings (ex-Reliance Jio) and US$ 20 billion in cash flows over FY17-FY19E, the telecom arm would be less of a concern three years on, even if it’s still loss-making,” the brokerage firm said in a report dated September 1, 2016.

“RIL has launched its pan-India digital services (4G broadband, voice, data content, cloud services, entertainment, MSO), after a over whelming response during its soft launch. Reliance Jio is expected to garner significant market share given its higher speed, wide coverage and competitive pricing,” said Karvy Stock Broking and recommended the stock with target price of Rs 1,280.

RIL is expected to maintain profitability in its core business with a capex that increases the operational efficiency and volumes across the refining & petrochemicals business, while new businesses like the Reliance Jioand retailing are likely to trigger the next level of growth and boost revenues, it added.

At 11:25 am, the stock was up 1.8% at Rs 1,085 on the NSE. A combined 2.72 million shares changed hands on the counter on the NSE and BSE so far.

Reliance Industries Limited (RIL)