RIL shares surge to near all-time high. Key factors driving the stock
2 min read 20 Apr 2022, 11:18 AM ISTCrude oil prices have remained positive and hence market is expecting strong Q4 numbers, say experts
PremiumReliance Industries (RIL) shares have surged to near all-time high on expectations of strong Q4 numbers of Reliance Petrochemicals on improving GRM (gross refining margin) in recently ended March 2022 quarter. Extending its rally for the second successive session, RIL share price today climbed to its intraday high of ₹2,731 levels, around ₹20 away from its all-time high of ₹2,751.
According to market experts, crude oil prices have remained positive throughout Q4FY22 and hence Dalal Street is expecting strong quarterly numbers from the company, especially in Reliance Petrochemical business on improving GRM. They said that Reliance Jio results are also expected to improve as market is expecting rise in ARPU (Average Revenue Per User) in Q4 FY2021-22.
“Crude oil price have remained positive throughout Q4FY22. Hence, market is expecting big improvement in GRM leading to strong Q4 results. So, bulls have been pumping money in RIL shares for last two sessions despite weak sentiments," said Ravi Singhal, Vice Chairman at GCL Securities. He added that recent stake buy from Reliance Retail in fashion line Abu Jani Sandeep Khosla is also a short term reason for the rise.
“A decade back, investors had concerns on investments of RIL in both Jio and Retail. However, RIL turned both the businesses around such that they stand as tall as the behemoth standalone segment in terms of EBITDA contribution. In fact, due to better prospects, Jio and Retail command a staggering two-thirds of the total valuation currently," said Motilal Oswal in a recent report on RIL share outlook.
The brokerage report added that RIL Chairman Mukesh Ambani's recent announcement to foray in green energy has been taken positively by the stock markets as well.
“RIL is expected to generate good cash flows, which will help the company to transform its traditional energy business into a new modern green and clean energy one. Due to the above factors the share has recently outperformed the index and is expected to give good returns in the medium to long term," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Expecting this bull run in Reliance Industries shares to continue after some consolidation, Ravi Singhal of GCL Securities said, "Reliance Industries shares have strong support at ₹2550 levels and it is expected to remain intact during consolidation expected after this sharp rise in the stock. Those who have this stock in portfolio can continue to hold the counter for next 6-9 months and any dip in this phase would be a buying opportunity for the index heavyweight." He said that the stock may go up to ₹3200 to ₹3400 per share levels in 6-9 months.
Reliance Industries jumped 1.3 per cent, a day after Reliance Brands said it had signed a deal to buy a 51% stake in fashion label Abu Jani Sandeep Khosla.
Reliance Industries closed up 3.8% at a two-week high after Morgan Stanley added it to its global emerging market focus list, citing "multiple positive triggers lining up for the conglomerate to outperform".
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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