RIL share rises in early trade; among top Sensex, Nifty gainers

Share of Reliance Industries (RIL) led the charge in early trade today contributing to market's upward trajectory after a brief phase of volatility in the last few sessions. While Sensex rose 216 points to 38,267, Nifty gained 72 points to 11,319. RIL share price gained 1.96% to Rs 2,132 against previous close of Rs 2091 on BSE. The scrip was among top gainers on Sensex and Nifty.

Reliance Industries share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. In one year, RIL share has gained 66.63% and risen 40.58% since the beginning of this year. The share has climbed 11% in a month.

Market cap of RIL stood at Rs 13.47 lakh crore on BSE.

The large cap stock has gained after 4 days of consecutive fall. It is 3.45%  away from all time high of Rs 2,198 reached on July 27, 2020.

Total 2.10 lakh shares changed hands on BSE amounting to turnover of Rs 44.86 crore.

The share hit 52 week low of Rs 867 on March 23. Since then, the stock has risen 145% till date.

The strong recovery in RIL stock came as the firm raised Rs 2.13 lakh crore through a Rs 53,000 crore via rights issue and Rs 1.52 lakh crore from sale of Jio Platform shares since April this year.

Brokerage Motilal Oswal has given a target price of Rs 2,250 on the stock.

"Using SOTP, we value refining and petrochemical segment at 7.5 times to arrive at a valuation of Rs 545/share for the standalone. We have ascribed an equity valuation of Rs 1,125/share to RJio and Rs 580/share to Reliance Retail. Reiterate Buy with a target price of Rs 2,250/share," it  said.

Edelweiss  Securities in a report said, "On the path to zero net debt by FY22, we  believe  RIL  would  comfortably  achieve  zero  net  debt  by  FY22  following  its  rights  issue and  stake  monetisation  in  several  businesses,  even  after  accounting  for  creditor  capex  and spectrum liabilities. Adding   the   creditor   capex   of   Rs 50,000 crore and   spectrum   liability   of Rs 20,000 crore,  we  reckon  an  adjusted  net  debt  figure  of  about  Rs 2.57 lakh crore. Along with free cash flows, we believe that RIL shall comfortably turn net cash by FY22E. Maintain 'HOLD' with unchanged target price of Rs 2,105."

On the other hand, brokerage UBS has downgraded the stock to neutral from buy.  

While assigning neutral call to RIL share , the brokerage said it believes that the firm's key segments - oil-to-chemicals, retail and digital - could face macro headwinds. However, UBS raised the target price to Rs 2,300 from Rs 1,700 after rolling over valuations to FY22.

The brokerage said discount to fair value of RIL has turned into a premium after the conglomerate has deleveraged ahead of investor expectations.

UBS said this premium would be justifiable given its leading presence in India's digital and e-commerce ecosystem. However, the pandemic-driven macro economic slowdown poses significant challenges for the Mukesh Ambani-led firm.

RIL's net profit rose 30.6 per cent than it was in the same period a year back, and bettered the company's previous best of Rs 11,640 crore earning in October-December 2019.

The oil-to-telecom conglomerate said it logged a one-time gain of Rs 4,966 crore from sale of 49 per cent stake in fuel retailing venture to BP Plc.

Reliance Retail profit hit by coronavirus, EBITDA nearly halves to Rs 1,083 crore

RIL's telecom arm Jio recorded a 183 per cent rise in standalone net profit to Rs 2,520 crore and covered up for drop in earnings from mainstay segments.