Rajen Shah, CIO of Angel Broking told CNBC-TV18, "We surely believe that this market is headed much higher and if you have a timeframe of anywhere between 36 months and 48 months, investment in quality companies should lead to rich rewards and that is why we are focusing totally on investment which we have been doing for the last so many years in the market.”
“Reliance Industries Ltd (RIL) looks extremely promising because it has not at all participated. If you see from January 2008 onwards till now, the markets are up about 25 percent. We touched the peak of 21,000 in January 2008, we are at 26,000. So it is up 25 percent but if you saw Reliance, it was Rs 3,200 then post bonus 1:1, it is down from Rs 1,600 to almost Rs 1,000. So that is an underperformance of 35 percent vis-a-vis Sensex, which has moved up by 25 percent. So it has clearly underperformed over the last almost six years and I think a catch up is on the cards,” he added.
“All the investment, which is going into Reliance will start yielding results post 2016 onwards. That is when we expect this company to report earnings of about Rs 130-135. You give it 13-14 P/E because I am sure that this company will demand that kind of P/E multiple in a roaring bull market. We have arrived at a price of Rs 1,700-1,800, so if you are investing in Reliance, hold it for three years, you should surely make about 70 percent tax free returns,” he said.
Disclosure: Network 18, which publishes moneycontrol.com, is now part of the Reliance Group.
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