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Brokerages remain bullish on Reliance Industries post AGM announcements

Brokerages remain bullish on Reliance Industries post AGM announcements

Brokerages remain bullish on Reliance Industries post AGM announcements
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By Mousumi Paul  Aug 13, 2019 9:42:10 AM IST (Published)

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SUMMARY

At RIL's 42nd AGM, chairman Mukesh Ambani focused on the three core areas that will lead the group's growth in the coming years — retail, digital and oil refinery. The main highlights from the annual general meeting were new deals with Saudi Aramco and BP, reliance Jio GugaFibre commercial launch, Jio-Microsoft partnership and the zero net-debt by FY21. Brokerages gave positive view on the stock, terming the zero-net debt plan and Saudi Aramco deal as key positives for RIL. Here is what analysts say about RIL

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CLSA retains ‘buy’ rating on Reliance Industries with target price at Rs 1,530 per share. The research house said that the AGM announcement should dispel fear over leverage since the company sets the stage for the next leap for company’s technology and consumer business. CLSA believes that RIL may see a re-rating as reach of technology and consumer businesses is appreciated. (Image : Reuters)

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Nomura gave a ‘buy’ rating to the stock with a price target at Rs 1,600 per share saying that the roadmap to zero net debt plan is a key positive. The brokerage further added that the oil-to-chemical business may not be demerged soon, and that the Saudi Aramco deal will be 6 percent EPS dilutive for company’s standalone by FY21. (Stock Image)

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Jefferies gave ‘underperform’ rating to Reliance Industries with a target price of Rs 990 per share. The research house believes that the clear intent is to deleverage with the help of lower capex. It also said that the key plan is a 20 percent sale of its oil-to-chemical business to Saudi Aramco. It further presumes Rs 0.6 lakh crore cut in the net liability than Rs 1.5 lakh crore by March 2021. (Stock Image)

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Morgan Stanley upgraded the stock to ‘overweight’ from ‘equal weight’ with a target price at Rs 1,349 per share. The brokerage believes that its time to relook the stock, and that cheaper ethane feedstock could drive upside in price-to-earnings. Morgan Stanley forecasts that faster asset monetization could be a surprise. (Image: Reuters)

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Macquarie upgraded Reliance to ‘outperform’ with target price raised to Rs 1,370 from Rs 1,220 per share. The research house expects 19 percent upside following the stream of bullish newsflow at the AGM. The company’s target reflects Saudi Aramco’s premium bid for refining and chemicals business. However, the brokerage maintains cautious stance as the free cash flow outlook has not changed. It also added that Saudi Aramco’s transaction will serve to allay concerns on growing net debt. It also doesn’t see zero net debt in its base case and considers company’s recent InvIT transactions as a mere debt-reclassification strategy. (Stock Image)

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