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RIL becoming a net debtfree company is bringing relief to the stock, says market expert Prakash Diwan

Updated : August 13, 2019 10:50 AM IST

Market expert Prakash Diwan of altamountcapital.com shared his views and outlook on the market as well as select stocks. He spoke about Reliance Industries Ltd (RIL), Tata Communications, Motherson Sumi, Muthoot Finance and Bharat Heavy Electricals Ltd (BHEL).

“From Rs 1,400 the way the stock retraced all the way to Rs 1,100 closer to the announcement of the earnings, there have been significant shorts built in,” Diwan said on Tuesday.

“There is this announcement, which everybody is talking with both hands saying Saudi Aramco is on its way to acquire a stake, which is a great part of the news but it is going to be a while before all of that finally translates and Saudi actually writes a cheque. Till that the problems remain the way they were pre-annual general meeting (AGM) as well. So we are looking at a very clear game primarily from some traction that could happen on the ARPUs given some of the real ground-level changes that are effectively going to be implemented on the Jio platform,” he added.

“It is a great piece of news that there is at least a timeline to make it a net debt-free. That is going to be a relief in the stock today,” said Diwan.

“If you see the market behaviour today, there are two large issues, one is tariff issues and then the slowdown has now started impacting the secondary rung of nations. So the mood is not very salient to buy into this. Still, there is a stimulus on a policy response from the government that is structural which is long lasting. So whatever you saw on Friday in terms of the way the Maruti Suzuki and Eicher Motors bounce back, this whole respite is only short-lived. So there is going to be enough opportunity to buy but I would start veering towards midcaps at some point in time depending on which sectors take precedence in terms of this policy response. So wait for that, no hurries to buy yet,” he further mentioned.

 

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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