Bringing an end to 8 years of underperformance, RIL rallied 30 percent so far in the year 2017 and has been hitting a multi-year high on a regular basis
Bringing an end to 8 years of underperformance, RIL rallied 30 percent so far in the year 2017 and has been hitting a multi-year high on a regular basis, compared to a little over 2 percent fall in Tata Consultancy Services (TCS) in the same period.
There are many positive developments going in favour of RIL. The stock has been an analysts’ radar from the beginning of Jio launch back in the month of September 2016.
Apart from being under-owned, the major trigger which analysts are not forecasting and which is still not reflected in the valuations is the cash flows from RIL Jio from 2018-19 as well as refining margins which are likely to outperform its peers.
Goldman Sachs maintains a buy rating on Reliance Industries posts Q3 results with a 12-month target price of Rs 1210. The global investment bank expects RIL's refining margins to outperform peers due to high complexity.
Goldman Sachs expects full benefits of new refining/petchem projects in FY19. It also sees new projects driving FY16-19 earnings CAGR of 11 percent.
“RIL has broken out of multi-year consolidation in the last quarter out of an 8-year-old triangular formation on long term charts. Usually such a break out after prolonged consolidation shall lead to bigger rallies. In case of RIL, logical targets in the present robust bull market shall be to make new life time highs with a re test of 2008 high present around Rs 1,649 levels whereas pattern breakout target is placed around Rs 1,873 levels. Even after this kind of bigger rally which the counter witnessed recently it still qualifies as buy because of clearly visible upside potentiality,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in.
India’s oil & gas major witnessed long buildup on Tuesday with the rise in open interest (OI) which suggests traders are creating long positions, but delivery percentage remains low at 36 percent.
(Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.)