Ways2Capital Reviews : Reliance Industries Stock At Record High

Shares of Reliance Industries hit a new high on the BSE on Thursday. The stock is currently trading at Rs1,032 up by Rs12.05 or 1.18% from its previous closing of Rs1,019.95 on the BSE.

The market value of the company has appreciated by 50% from its 52-week low of Rs686 recorded on July 3, 2017.

In past one year, the stock outperformed the market by surging 45% as compared to 14% rise in the BSE Sensex.

The scrip opened at Rs1,023 and has touched a high and low of Rs1,032.55 and Rs1,020.40 respectively.

RIL is a vertically integrated company with business interests in energy, materials, media and mobile telecom. Its revenue comprised of refining business (54%), petrochemical business (24%) and others (22%). The company has rapidly grown its broadband business (4G) through RJio owing to strong operating competitiveness and healthy consumer traction.

RIL’s margins are expected to remain robust due to firm demand and improving utilization in polyester segment. This should keep RIL’s GRM (Gross Refining Margin) in the US$11-11.5/bbl range. Company’s petcoke gasifiers are under commissioning, which will ramp up over FY18-19E. Refinery Off-Gas Cracker (ROGC) of 1.5 MMTPA has been commissioned and fully operational now. We estimate revenue CAGR of 7% over FY18-FY20E. In addition, traction in subscriber base and new service offerings in RJio would enhance profitability. Jio’s RMS (revenue market share) is expected to be ~30% over next few years. Consequently, we expect PAT CAGR of 11% over FY18E-20E. The stock trades at EV/EBITDA multiple of 9.6x FY20E.

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About Bhoomi Desai

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