Edelweiss' report on Reliance Industries"Plummeting oil prices has taken a toll on Reliance Industries (RIL) stock, under-performed the NIFTY index by 12% over 2 months. We believe concerns are overdone as our stress-test shows that even at an oil price of USD40/bbl (long term), RIL’s EPS will rise 25% over FY15-18. In fact, we believe the WTI-Brent spread is narrowing on falling oil prices, enhancing RIL’s competitiveness. Moreover, past empirical evidence indicates that RIL is a defensive amongst global peers given its relative margin superiority and stability. We estimate the stock is pricing-in less than USD20/bbl long-term crude oil price. We reiterate ‘BUY’, TP of INR1,270", says Edelweiss research report.
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