Mumbai: Shares of India’s largest private enterprise Reliance Industries Ltd (RIL) on Monday gained as much as 2.53% after the company posted a higher-than-expected group profit helped by stronger margins in its core refining and petrochemicals business.

In intraday trade, RIL hit a high of 1,039 a share, a level last seen on 25 April, and gained as much as 2.5%. At 10am, the stock was trading at 1,029, up 1.62% from its previous close, while India’s benchmark Sensex index rose 0.56% to 27,991.77 points.

The stock gained in 12 out of 15 trading sessions. Since 24 June, the stock gained 9.2%, and so far this year, it gained 2%.

Most of the brokerages have increased the price target of the scrip. Motilal Oswal, CLSA, JP Morgan, Antique Stock Broking, Nomura and PhillipCapital have increased the price target of the stock after earnings.

Consolidated net profit rose 18% in the June quarter to 7,113 crore from 6,024 crore a year ago, said RIL, which has businesses ranging from oil to yarn and retail, and is preparing to launch a pan-India telecom network. The profit surpassed analyst expectations of 6,515 crore, Reuters reported. Revenue at the group level fell 13.13% to 71,451 crore from 82,509 crore a year earlier.

RIL was helped by a stronger-than-expected gross refining margin, or GRM, the difference between the per barrel price of crude oil and the value of petroleum products distilled from it. The company’s GRM strengthened to $11.5 from $10.4 a year ago. Analysts had expected a GRM of $9.5-10 per barrel.

“Earnings were ahead of the consensus, helped by better than expected refining margins. Rel Jio is in the final stage of optimising its network and its nearing launch in the next six months could be a key catalyst," CLSA said in a note to its investors.

“We are positive on the stock as the company’s major downstream capex cycle comes to an end with key value-added projects to drive earnings from FY18. Its telecom launch is also nearing and based on ramp up/performance, stock outlook would improve," said PhillipCapital in a note to its investors.

Motilal Oswal has maintained its rating to ‘neutral’ on the stock and increased the target price by 11% to 1,129 a share, CLSA has maintained its ‘buy’ rating on the stock and increased its target price to 1,350 a share, JP Morgan has maintained its “neutral" rating on the stock and increased its target price to 1,070 a share from 1,040 a share. Antique Stock Broking has maintained its ‘buy’ rating on the stock and kept its target price to 1,280 a share. Nomura has maintained its ‘buy’ rating on the stock and increased the target price to 1,260 a share and PhillipCapital has maintained a ‘buy’ rating and increased its target price by 15% to 1,160 a share.

Of the analysts covering the stock, 33 have a ‘buy’ rating, nine have a ‘hold’ rating, while one has a ‘sell’ rating, according to Bloomberg data.

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