Reliance Industries surprised the street by posting 24 per cent rise in December quarter profits supported by stronger than expected refining margins and solid demand for petro-chemicals.
Net profit for the October to December quarter was Rs 5500 crores, a turnaround after four quarters of sliding profits. Revenues rose 10 per cent, from a year earlier, to Rs 96,310 crores.
"After a long time RIL has surprised markets with extremely good set of numbers and this is what market participants were anticipating from the oil & gas major. It's just a matter of time -- I see the stock heading towards four digits mark," says Jagannadham Thunuguntla, Equity Head, SMC Capitals in an interview with ET NOW.
"Given the fact, the stock is underowned, many funds are likely to jump to own the stock after the results and that should push the stock higher and should now lead the next leg of the market rally," he added.
RIL is generally owned by large global funds with huge appetite. And if we compare it with PSU stocks in the same segment, they are less attractive due to government intervention to global funds, say analysts.
The oil & gas major, which has the maximum weightage in the benchmark index of 9.4 per cent, is likely to lead the next leg of the rally for markets, according to experts.
Like Thunuguntla, Ambreesh Balinga, Market Expert expects the stock to fly in trade on Monday morning and will lead the markets in next leg of rally. The way I see it, these results will take RIL closer to levels around 970-980.
"Even if the stock opens higher, investors can still look at buying the stock at levels around Rs 930-940. My next target is closer to Rs 969-970 in next few trading sessions," he added.
Balinga is of the view that going ahead, once we have March quarter results, RIL can very well move towards levels of Rs 1150 by April-May.
Ahead of the results many brokerage firms had upgraded their price targets and ratings for the oil & gas major.
Brokerages like Credit Suisse and CLSA have maintained outperform rating on RIL and raised their target price on expectations of improved earnings in coming years as the company continues its capex plans, better gross refining margins, retail business and higher gas prices.
Macquarie has upgraded the stock to outperform as it sees earnings improve on the back of capex. It sees the stock to hit Rs 1,100 in next 12-months.
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