Prayesh Jain of IIFL told CNBC-TV18, "One of the key reasons why Reliance Industries underperformed broader markets was the earnings growth. In the last three years including FY14 Reliance has delivered an average growth of around 5 percent or 6 percent, but now we are expecting 20 percent kind of earnings compound annual growth rate (CAGR) over the next three years including FY16. If you add FY17 where their pet coke gasification and off-gas cracker commence operations, the earnings CAGR is even higher."
"However, with that kind of earnings CAGR the stock should start trading in its historical range that is in the region of 12-14. The stock is used to trade at historical multiples. So, given that the stock is definitely headed for upside. We have a buy rating with a target price of Rs 1,027 on the stock," he added.
At 09:33 hrs Reliance Industries was quoting at Rs 876.65, down Rs 7.90, or 0.89 percent.
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