Reliance Industries rallies 7% in two days; stock nears record high

Long term prospects and dominant standing of RIL in each of its product & service portfolio provides comfort for long term value creation, analysts said.

Shares of Reliance Industries (RIL) were up 3 per cent at Rs 2,816.35 on the BSE in Friday’s trade, having rallied 7 per cent in the past two trading days amid heavy volumes. RIL has seen addition of Rs 1.25 trillion in its total market capitalisation of Rs 19.05 trillion during this period. 

The stock of the Mukesh Ambani-led company was trading close to its record high of Rs 2,855 touched on April 29, 2022. A combined 5.8 million equity shares had changed hands on the counter till 10:44 am. An average around 7 million equity shares have been trading daily in the past two weeks.

According to a media report, RIL and US-based Apollo Global Management are teaming to bid for Boots — the international chemist and drugstore unit of Walsgreen Boots Alliance Inc. The combined bid from Reliance and Apollo for Boots could come in as early as Friday, June 3. CLICK HERE FOR MORE

In the past one week, RIL has outperformed the market by gaining 9 per cent, as compared to a 2.6 per cent rise in the S&P BSE Sensex. In the past three months, it has rallied 19 per cent, as against a 2 per cent gain in the benchmark index. Analysts believe higher oil prices, expectations of recovery in refining margins, and ramp-up of Jio Mart should continue to support the stock.

"Long-term prospects and dominant standing of RIL in each of its product & service portfolio provides comfort for long term value creation. RIL’s consumer business will be the growth driver, going ahead. The company has a strong balance sheet post fund raising while its traditional business will generate healthy cash flows owing to favourable refining scenario in the near term," analysts at ICICI Securities said in a Q4 result update. The brokerage maintained its ‘buy’ rating on RIL with a target price of Rs 3,050 per share.

According to Motilal Oswal Financial Services, RIL stock should benefit from three areas-- accelerated EBITDA growth in Retail business, which garners about 4x higher valuation multiple v/s overall business; RJio’s steady revenue growth from market share gains, tariff hikes and other wireline/digital avenues; and better refining margin that should translate into 20 per cent EBITDA growth in the standalone business.