Bull of the Day: Stock that gained 31% in 1 month

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Bull of the Day: Stock that gained 31% in 1 month

Reliance Capital surged 9.72% or Rs 49.75 to end at Rs 561.80 on the BSE. It touched an intraday high of Rs 565.50 and an intraday low of Rs 513.70. There were pending sell orders of 1,292 shares, with no buyers available. The total traded volumes were of 2,781,892 shares. The share gained 31.15% in the last one month.

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Rel Capital BSE | NSE 30/05/12 Are Mutual Funds betting on Rel Capital? Other Stocks in this news Bajaj Holdings & Investment | Bajaj Finserv | Religare Enterprises | Responsive Industries | Tata Investment Corporation | JM Financial | Jindal South West Holdings | SE Investments | ILandFS Investment Managers |

Reliance Capital surged 9.72% or Rs 49.75 to end at Rs 561.80 on the BSE today. It touched an intraday high of Rs 565.50 and an intraday low of Rs 513.70. There were pending sell orders of 1,292 shares, with no buyers available. The total traded volumes were of 2,781,892 shares. The share gained 31.15% in the last one month.

The stock touched its 52-week high Rs 881.90 and 52-week low Rs 388.10 on 07 Oct, 2010 and 09 Feb, 2011, respectively. Currently, it is trading -36.3% below its 52-week high and 44.76% above its 52-week low. It market capitalisation stands at Rs 13,829.27 crore.

Its trailing 12-month (TTM) EPS was at Rs 8.19 per share. (Dec, 2010). The stock's price-to-earnings (P/E) ratio was 68.60. The latest book value of the company is Rs 282.70 per share. At current value, the price-to-book value of the company was 1.99. The dividend yield of the company was 1.16%.

Why the run up?

Nippon Life Insurance Company, Japan's largest life insurer by revenue, signed a definitive agreement to acquire a 26% stake in Anil Ambani-led Indian insurer, Reliance Life Insurance. However, the transaction is subject to necessary regulatory approvals.

Nippon Life Insurance will invest an aggregate value of Rs 3,062 crore (USD 680 million) to acquire a 26% strategic stake in Reliance Life Insurance. This transaction pegs the total valuation of Reliance Life Insurance at approximately Rs 11,500 crore (USD 2.6 billion).

What analyst says?

Kunal Bothra, Sr Technical Analyst, LKP Share said that, "On Reliance Capital we can keep a stoploss of close to Rs 520 and we might see levels of Rs 575 and Rs 580."

Also, Bank of America-Merrill Lynch (BofA-ML) has upgraded Reliance Capital  to 'buy' from 'underperform' as the stock looks attractive given its recent correction. The stock is down nearly 40% since October 2010, BofA-ML said in a note.

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