Enter in Reliance Petroleum at Rs 145: VK Sharma

VK Sharma, Anagram Stock Broking is of the view that one can enter in Reliance Petroleum at Rs 145 odd.

Sharma told CNBC-TV18, "Till the time RPL commences production, it is going to enjoy the highest Gross Refinery Margins (GRM); it parent does enjoy the highest percentage GRMs and also because of the fact that the same consultants who put up the refinery are doing the job here. So there is no reason to believe that the off swing also would have continued to behave and continue to enjoy the same margins but that’s in the longer-term. In the short-term of course there is a feeling that is coming that GRMs are falling necessarily because the crude price, the ratio in which it is increasing, the end product is not rising in the same proportion."

He further added, "So there is a mismatch here and therefore because of the GRMs which are falling in the Singapore refineries, I suppose which is a benchmark for the global ones and Reliance beats that with a wide margin. But in the shorter-term the counter till it starts producing, it will continue to behave the sentiment which is globally and that does not augur well for the counter.

"I suppose somebody wanting to look at as a technical buy or something sentiment wise probably at Rs 145 odd it might be a good price to enter but with the kind of the rise that the investor has for three years, I think he would do well to stay invested in this stock for anybody having bought the stock at the nearby price. My recommendation would have been a sell." 

Disclosure: Analyst has an indirect interest in all the stocks discussed.