Reliance Industries

Reliance would not hit 3 digit mark easily this time

Posted by : suvvena

My personal view is reliance would not touch three digit mark easily this time.It might hover around current levels for some time.Watch for dow jones if it breaches its prev low only then reliance would touch 3 digits.I might be totally wrong.I hold reliance at 1220 levels.

This too shall Pass, Dawn is still pretty far away...

Posted by : suvvena

Bhusbac,Accept my hearty congrats on the detailed analysis of RIL.Yours posts are truly informative.Keep up the good work.

Stay away from Reliance Industries: Sukhani

Posted by : knair

Dear bhusbhac,

This refers to your reply to INVESTOR 11.

I have seen your post reg FII holdings in RIL.

It is interesting to read an article like this when there are lot of data to be supported.

You say that RIL is a good hold as well as psu banks.

It is difficult to oppose your argument as it has taken well with detailed accounts.

As per your report, the stocks you mentioned have improved the BV in 2008 from 2007.

In my case I hold RIL, LT, ABB and icici bank. All of them are now in red (as I did not sell them when they were in green). The present position was not on expected lines. As rightly said, the experts and news channels sensationalised the stories thereby creating panic in the mkt. We have now reached a stage where it is foolishness to sell these stocks. Time will change and position will also change. What we need today is some patience.

I know you are not advising for a hold or distribution. We can exchange views in any situation.

knair

This too shall Pass, Dawn is still pretty far away...

Posted by : bhusbhac

Dear curious cat - I am not getting left handed with anyone! I have been making some studies although this is neither my profession nor do I have enough education to make economic studies to tell anyone on this board with 100% certainty. However I have business which I can compare with the ground reality and the stock market. If you heard Honourable Finance Minister today the reality on ground zero should strike to you most.

I am 1/1000 of retail investors and maybe 2/3 Indians alongwith the rural poulation who believe in what our Honourable Finance Minister has to say. I quite understand that he just treats the NIFTY and SENSEX as an index and he is not about to pump in good money in a direction which makes no sense at all. Today in my sense the NIFTY and SENSEX reflects more of our hurt sentiments and lack of confidence than the reality!

So our rural farmers have more money and activity today so diversify and do what is necessary for the domestic demand. Let eevn RIL stagnate or slowdown the Retail sector even further and make more attractive panwallah tellas in rural India!

Now where RIL stands today oil and gas production is an even more important sector for IMPORT substituition than exports. In the last AGM mukeshbhai stated that at US$ 48 = Rs 1920 per barrel equivalent RIL was making decent margins and also our Indian Government saves a huge outflow of foreign exchange. Today US$ 48 translates to Rs 2400 and US$ 55 translates to Rs 2750. The US$ 55 stands almost at US$ 70 even today when we compare exchange rates. So in OUR reality we may see crude once again at around Rs 4000 when crude in teh real world goes even upto US$ 72/-.

So I dont see any loss in gross refinery margins and sale of oil and gas production going forward as it is made out to be once we convert to Indian Rupees.

So forget the US markets and the US$ going forward!

Rememember that Honourable Finance Minister stated in no less terms that we investors in the stock markets lack courage and confidence. We are a minoirty junta so it is entirely upto us to LIFT this market and join hands wioth the rural efforts!

Once again if you are an investor or an employee of the company and want to stay with your job your portfolio already you need to seriously consider expanding your shareholding which will greatly increase your comapnies market cap which in turn will help them diversify quickly for the better opportunities out there!

This too shall Pass, Dawn is still pretty far away...

Posted by : curious cat

Dear Bhusbhac,
First of all i am a buyer of RIL. I have some already, even lots of RPL. I am just waiting for a nice dip. Things have fallen on account of easy money not coming by. What can the Indian government do if there is a sharp decline in demand & bankruptcy due to none availability of easy funds overseas and elsewhere.
Unscrupulous (capitalist) bankers have lent money left & right to people who normally need to be kept on leash. They made their sales, claimed their bonuses & took off for you & me to deal with defaulters. They have not lent their personal money. It was public/govt money.
I always believe what is yours will be with you hence there is no question of smartness in terms of being able to buy at bottom & selling on top, etc, etc
You have to be lucky for not being all invested by the time such times show up.
I tired to buy RIL at 2100, then 1600, then 1150 but somehow luckily missed it. Now i am simply waiting to see how dec & jan starts to pan out. Its pure luck that i was unable to buy it then. Now i stand to get more units in my purchase budget.
When one misses out a buy in a bull market, one feels sad. However in the bear market it is a blessing to have missed it. Always thought but never believed it could be so bad....
Please do not get left handed with me with,

This too shall Pass, Dawn is still pretty far away...

Posted by : curious cat

Dear Bhusbhac,
First of all i am a buyer of RIL. I have some already, even lots of RPL. I am just waiting for a nice dip. Things have fallen on account of easy money not coming by. What can the Indian government do if there is a sharp decline in demand & bankruptcy due to none availability of easy funds overseas and elsewhere.
Unscrupulous (capitalist) bankers have lent money left & right to people who normally need to be kept on leash. They made their sales, claimed their bonuses & took off for you & me to deal with defaulters. They have not lent their personal money. It was public/govt money.
I always believe what is yours will be with you hence there is no question of smartness in terms of being able to buy at bottom & selling on top, etc, etc
You have to be lucky for not being all invested by the time such times show up.
I tired to buy RIL at 2100, then 1600, then 1150 but somehow luckily missed it. Now i am simply waiting to see how dec & jan starts to pan out. Its pure luck that i was unable to buy it then. Now i stand to get more units in my purchase budget.
When one misses out a buy in a bull market, one feels sad. However in the bear market it is a blessing to have missed it. Always thought but never believed it could be so bad....
Please do not get left handed with me with,

This too shall Pass, Dawn is still pretty far away...

Posted by : bhusbhac

Dear investor11 - IN THE REAL ECONOMY! If you have a small business catering to DOMESTIC demand and if at least you know a friend who has such a business chances are that he will tell you he is not affected at all or at least not that much so far. So most of these kind of business other than real estate and four wheelers there are not much affected as yet. They may remain unaffected and most take a hit of 10% to 20%!

In case of real estate the price of prime land is still stagnant however real estate companies have started discounting 15% to 20% and this is justified since prices of steel and cement have come down drastically in their construction costs. I think land prices and the constructed properties I mentioned need to come down considerably say 15% to 30%.

Exporters are affected 15% however GOI is trying to work out something to boost them up, if possible.

Our markets are down 0ver 60% primarily since the valuation from the point of Indians are different from those of FIIs in the BULL market phase. If matters remain as they are markets will shoot up as and when the US markets stabilise and they have to look at Emerging Markets again. I do not say theat US markets will recover or rebound I just say as soon as they stabilise and the weakness of the US Dollars come to the fore they will be re-investing in Indian Markets.

In RIL there is a vacuum and change of hands from FIIs to Indians of approx 4 crore shares valued at Rs 40,000 crores. As soon as US markets stabilise oil will shoot up to US$ 70 - US$ 80 or even more! Remember we have an onset of winter so the G3 nations will be spending more on their heating and that needs oil and gas! Indian Rupee will appreciate from a height of around US$ 55/-. All these factors will favour RIL and alos Indian stock markets having readjusted themselves to an over 70% oil and gas producing company model going forward! I was surprised to see that their other business including retail and polyester is not even 10%!

So how much time will it take? To reach Rs 2000/- it should not be more than one to to quarters at the worst. To reach 3000/- well I have explained and painted the scenario it should really not take too much time thereafter either!

Some STUPID PROFESSIONAL investors are still buying at Rs 1140 from SMART YOU and at Rs 1090 from the even SMARTER ones!

So I say that professional experts who are not being paid by YOU are not telling you the 100% truth! They are not about to be so foolish only our GOI can be truthful to you so trust and believe!

This too shall Pass, Dawn is still pretty far away...

Posted by : bhusbhac

Dear investor11 - IN THE REAL ECONOMY! If you have a small business catering to DOMESTIC demand and if at least you know a friend who has such a business chances are that he will tell you he is not affected at all or at least not that much so far. So most of these kind of business other than real estate and four wheelers there are not much affected as yet. They may remain unaffected and most take a hit of 10% to 20%!

In case of real estate the price of prime land is still stagnant however real estate companies have started discounting 15% to 20% and this is justified since prices of steel and cement have come down drastically in their construction costs. I think land prices and the constructed properties I mentioned need to come down considerably say 15% to 30%.

Exporters are affected 15% however GOI is trying to work out something to boost them up, if possible.

Our markets are down 0ver 60% primarily since the valuation from the point of Indians are different from those of FIIs in the BULL market phase. If matters remain as they are markets will shoot up as and when the US markets stabilise and they have to look at Emerging Markets again. I do not say theat US markets will recover or rebound I just say as soon as they stabilise and the weakness of the US Dollars come to the fore they will be re-investing in Indian Markets.

In RIL there is a vacuum and change of hands from FIIs to Indians of approx 4 crore shares valued at Rs 40,000 crores. As soon as US markets stabilise oil will shoot up to US$ 70 - US$ 80 or even more! Remember we have an onset of winter so the G3 nations will be spending more on their heating and that needs oil and gas! Indian Rupee will appreciate from a height of around US$ 55/-. All these factors will favour RIL and alos Indian stock markets having readjusted themselves to an over 70% oil and gas producing company model going forward! I was surprised to see that their other business including retail and polyester is not even 10%!

So how much time will it take? To reach Rs 2000/- it should not be more than one to to quarters at the worst. To reach 3000/- well I have explained and painted the scenario it should really not take too much time thereafter either!

Some STUPID PROFESSIONAL investors are still buying at Rs 1140 from SMART YOU and at Rs 1090 from the even SMARTER ones!

So I say that professional experts who are not being paid by YOU are not telling you the 100% truth! They are not about to be so foolish only our GOI can be truthful to you so trust and believe!

This too shall Pass, Dawn is still pretty far away...

Posted by : curious cat

RIL is held up artificially. Lets see how much more strength does its boss have. Most of these figures of eps crap does not hold any meaning when money is hard to come by. Look at our industrialist`s faces in the various conferences that are being held. They talk like a typical patients. They are talking in third party terms. They pretend that they are not so much in need of liquidity as the other guys need. The fact is that most of them are screwed. They have expanded at a time when things were still expensive. Now they are half way through and the tank is running dry. Actually speaking it is in these times the fortunate ones with cash must be getting ready to strike deals.
No amount of Ostrich like behavior will save the day. Face the situation like a Samurai and do not live in denial. Fight it without singing yourself a lullaby. This too shall pass. Swimming against the tide will drown you. For those who did not cash out, next time remember to do so when the bull run is in the 5th year. Something that i will atleast never forget. I say it was a blessing that ADA was not allowed to go through with MTN deal. He must strike it in 2009.

Stay away from Reliance Industries: Sukhani

Posted by : bhusbhac

Dear investor11 - Really so many people coming out with just bland downward targets and an unnecssary attack on RIL and promoters due to the prevalent media hype. The present situation in our REAL economy has been the excessive negative media hype and our experts possibly taking advantage and misleading us to part with shares at rediculous prices.

I am trying to make sense of the shareholding pattern of FIIs firstly in RIL and then in other companies. Howver I need some boarders help in arriving at further direction.

Now there have been talk of persons suggesting to go into other stocks other than RIL. Here is comparrison and some of them look better than RIL and still are tanking the most!

RIL BV 2007 431.92 EPS 85.71
RIL BV 2008 535.64 EPS 134.19

LT BV 2007 199.70 EPS 49.53
LT BV 2008 319.85 EPS 74.35

ABB BV 2007 275.37 EPS 80.30
ABB BV 2008 377.07 EPS 116.01

Siemens BV 2007 62.75 EPS 21.69
Siemens BV 2008 93.11 EPS 35.39

SBI BV 2007 594.69 EPS 86.29
SBI BV 2008 776.38 EPS 106.55
(EPS as of 31st September 2008 = Rs 142.67)

ICICI BV 2007 273.25 EPS 34.95
ICICI BV 2008 516.76 EPS 46.23
(EPS as of 31st September 2008 = Rs 36.44 Last DPS = Rs 13.65)

PNB BV 2007 321.65 EPS 48.84
PNB BV 2008 341.98 EPS 14.75
(EPS as of 31st September 2008 = Rs 77.35 Last DPS = Rs 13)

BOI BV 2007 120.66 EPS 38.18
BOI BV 2008 167.69 EPS 22.99
(EPS as of 31st September 2008 = Rs 50.38 Last DPS = Rs 4.67)

EPS is the most important factor in a bull run. In a BEAR market BV and some other historical factors come into play. If it is a going concern the minimum share prices could be 2x the book value which is the price as of today. Hence trading is taking place mostly in this range and it can hit lower only for short periods. How the book value goes up over a period of time is not in my purview as I have not reached that far.

In case the company closes down even then the share should be trading at book value as the minimum.

RIL is not going to close down in a hurry! Once the bull run commences EPS will takeover. Look at the EPS already achieved by some of the PSU banks also RIL and take a call accordingly. I feel PSU banks are also good to hold in your portfolios!

So here is RIL and some additions and alternatives as well. Why not make a portfolio of 1 share each after making some more analysis of your stocks and see how it goes!

Stay away from Reliance Industries: Sukhani

Posted by : investor11

Thanks for wonderful analysis mr bhusbac,i have other point of view,price of stock is not determined by its present EPS which reflect past growth,it is determined by future buissness and and prospects,thats is why most of PSU bank and commodity stock are trading at 1X or 2X of annulised EPS as many economy are in recession or likely to be hence there fututre prospects are going to get hit .However in case of RIL oil and gas is the future US has captured Iraq for oil ,Indias 60% requirement will be supplied by RIL
look at the management Indias richest man great track record so we must give respect to that hence should commond higher PE multiple than other peer bluechi[p
EPS of 134 at 10 PE translate to 1340 for bear market it is reasonable for bull market forward earning growth of 30% hence EPS to be 175 20 PE multiple is reasonable(people paid 100 pe in 2000 to many IT)hence it comes to 3500 taht is my target,when pscizophrenic attack of market will over it come to its fair valu e of 1400 that would happen sooner than later
best

Stay away from Reliance Industries: Sukhani

Posted by : bhusbhac

Dear investor11 - Really so many people coming out with just bland downward targets and an unnecssary attack on RIL and promoters due to the prevalent media hype. The present situation in our REAL economy has been the excessive negative media hype and our experts possibly taking advantage and misleading us to part with shares at rediculous prices.

I am trying to make sense of the shareholding pattern of FIIs firstly in RIL and then in other companies. Howver I need some boarders help in arriving at further direction.

Now there have been talk of persons suggesting to go into other stocks other than RIL. Here is comparrison and some of them look better than RIL and still are tanking the most!

RIL BV 2007 431.92 EPS 85.71
RIL BV 2008 535.64 EPS 134.19

LT BV 2007 199.70 EPS 49.53
LT BV 2008 319.85 EPS 74.35

ABB BV 2007 275.37 EPS 80.30
ABB BV 2008 377.07 EPS 116.01

Siemens BV 2007 62.75 EPS 21.69
Siemens BV 2008 93.11 EPS 35.39

SBI BV 2007 594.69 EPS 86.29
SBI BV 2008 776.38 EPS 106.55
(EPS as of 31st September 2008 = Rs 142.67)

ICICI BV 2007 273.25 EPS 34.95
ICICI BV 2008 516.76 EPS 46.23
(EPS as of 31st September 2008 = Rs 36.44 Last DPS = Rs 13.65)

PNB BV 2007 321.65 EPS 48.84
PNB BV 2008 341.98 EPS 14.75
(EPS as of 31st September 2008 = Rs 77.35 Last DPS = Rs 13)

BOI BV 2007 120.66 EPS 38.18
BOI BV 2008 167.69 EPS 22.99
(EPS as of 31st September 2008 = Rs 50.38 Last DPS = Rs 4.67)

EPS is the most important factor in a bull run. In a BEAR market BV and some other historical factors come into play. If it is a going concern the minimum share prices could be 2x the book value which is the price as of today. Hence trading is taking place mostly in this range and it can hit lower only for short periods. How the book value goes up over a period of time is not in my purview as I have not reached that far.

In case the company closes down even then the share should be trading at book value as the minimum.

RIL is not going to close down in a hurry! Once the bull run commences EPS will takeover. Look at the EPS already achieved by some of the PSU banks also RIL and take a call accordingly. I feel PSU banks are also good to hold in your portfolios!

So here is RIL and some additions and alternatives as well. Why not make a portfolio of 1 share each after making some more analysis of your stocks and see how it goes!

Stay away from Reliance Industries: Sukhani

Posted by : bhusbhac

Dear kadiyali - This BEAR market has to end sooner the better. So we try and fight till the turnaround I certainly will not take defeat lying down. FYI I never looked at fundamentals all this time. I am doing so in preparation to latch on to a properly worked out portfolio and an investment plan spanning next 3 to 5 years but I want that bull run to start earliest possible, if POSSIBLE, tomorrow itself! I want to see that this unnecessary tanking stop further. Of course I cannot do this all on my own since the BEAR phase is now all at professional levels.

I doubt very much that even 1/10000 shares is bought by retail investors what is of greater concern is our holdings!