Mumbai, Jan 15 (): The hottest stock among the Indian stock brokers is Reliance Industries (RIL), India’s largest company by market value. The company is expected to post huge profits in the current year with the roll out of its fourth generation (4G) data-driven network in June this year and C Rangarajan report has recommended higher prices for natural gas from its Krishna Godavari fields.
The RIL for the past few years has been on the sell category even though it accounts for 9% of the 30-share Sensex. RIL has not been showing any returns for more than 18 months as it cut down its gas production by two-thirds.
RIL has been frustrating the investors for the last 25 years but now the stock is expected to give returns between 25% and 60% over the next two years. RIL is to announce its third quarter results on Friday.
Last year in 2012, RIL expected to give 26% return but gave only a return of 18% and that too only in the last four months of September and December 2012. RIL spent Rs 3,900 crore, or 38.5% of its total Rs 10,440 crore kept aside for the buyback of shares which ends on January 19.
Those brokerage houses, which had been downgrading the stock for a year, have now put a ‘buy’ call on the scrip. CLSA, Goldman Sachs, Deutsche Bank and Sanford C Bernstein have rated RIL as ‘buys’ with aggressive price of Rs 930 to Rs 1010 targets for the next one year.
Local brokers put its price target at Rs 906 and closed at Rs 847, up Rs 7.65, or 0.9%, on BSE. The valuation of RIL stock has been attractive and big institutions are in a buying frenzy in recent months.
$4.2/mmbtu price in KG basin well of RIL should be upped to to $8/mmbtu, said C Rangarajan, economic advisor to the Prime Minister in a report submitted to the government on January 3, 2013.