Reliance Industries may trade in Rs 710- 750 range: Tulsian

Tulsian told CNBC-TV18, “Reliance Industries results are disappointing, because if you break the results having posted by the company close to Rs 20,000 crore PAT if you break them in two parts H1 and H2. In H1 they have Rs 11,600 crore. In H2 they have Rs 8,600 crore. So obviously the H2 results are going to get extrapolated. I don’t think that there is any problem or concerns on petchem and on the refining front. Probably one can expect a slight improvement, maybe of about 20 bps to 50 bps on both the segments. But I think the concerns really lie on upstream and the kind of increase which we have been seeing from the finance contribution, from the financial activities of the company.”

He further added, “If you see 25% of the net profit of the company in the second half has come from the finance activity. If you take the recent development company will be carrying out a survey of D6 and the report will be submitted by October. So that means practically first three quarters don’t expect any ramp up in the upstream production. So I don’t think that one can really justify a PE multiple of more than 13-14 and you doubt whether the EPS will be at Rs 55-56 or Rs 60 maximum for FY13. So taking that into consideration I think share should hover in a range of about maybe Rs 700-710 to Rs 750-760 because even company may not be in hurry to initiate the quick buyback to support the share price and finish the obligation on part of them at least to buy 3 crore shares and eventually the 12 crore shares which they have earmarked. Overall take a broad range of anywhere about Rs 710 to Rs 750-760 for the next three months or so."