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Moneycontrol.com >> Message Board >> View Messages >> Reliance
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Several Positives Exist - OVERSOLD! (3)   25-Jul-08 17:26Tracked by (0)  
Posted by:   bhusbhac on ( 25-Jul-08 17:26 )
Price : BSE: Rs 2147.35 ( -6.90 % ), NSE: Rs. 2147.10 ( -6.97 % )
Due to the global turbulence of the past 7 months and the political situation there are now several positives looking forward and there is no cause for any negative especially where Reliance is concerned.

1. The first quarter was not expected to be exceptional and there is an element of understating the profits due to the needless threat of windfall taxation. This should become clear soon. Also it is to be noted that afterall there has been phenomenal growth in sales and profits can follow later.

2. K G Basin gas finds and other progress in refinery are expected to fructify and go forward in starting from 2nd quarter onwards. This factor should take the growth of Reliance well over 30% at least from the 3rd quarter onwards.

3. Crude oil has cooled off from the peak. Should growth have been affected any further in Indian business it would automatically trigger a crash in crude oil.

4. Inflation seeing signs of cooling off. Although there is some threat of a possibility of drought in some areas in our country I still think we should be OPTIMISTIC until things get really bad if they have to. Somehow if we have an optimistic outlook things start shaping up for the better. What has made the matters worse for markets and business is the general pessimism which sort of puts a break on development and expansion programmes of companies whereas on the otherhand there would be expansion and progress.

5. If we have a positive outlook it will also rub off on the FIIs who will look at our markets more positively.

6. NIFTY at 4000 level a growth of 15% has alreay been established and NIFTY ought to have recovered to well over 4600.

7. Even the most pessimistic BEAR has agreed that our markets are heavily OVERSOLD.

The UPA Government went ahead with the bold step of NUKE deal and that itself should make us have an optimistic outlook. There has to be a future ahead for all of us somewhere and somehow.

So let us discount the 1st quarter gone there is not enough reason anymore that there will not be a turnaround suddenly and swiftly. So Reliance can still more than likely use the current pedestal to quickly move to a level where the market considered Reliance to be a good buy at 3200!

Through the Congress Mukeshbhai will certainly get around SP since according to the winds die hard enemies are becoming friends these days.

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