RIL Stock Price Gains Over 1% After Friday's Steep Losses; Pares Gain Later

After the RIL stock saw a sharp blow in its stock price on Friday post the export duty hike on petrol, diesel and ATF and alongside levy of windfall gains tax, there is seen some respite in trade today (July 4, 2022). RIL share price in intra-day trade zoomed over 1.25% to day's high price of Rs. 2438.9 per share on the NSE. Nevertheless as the larger market mood is bearish, RIL also pared gains and was last trading with minor gains of just 0.24% at Rs. 2414.1 at around 10:11 am.

As per experts, RIL stock which has come down reasonably can see further pressure and the market is likely to further discount on RIL shares when it opens the next week i.e. precisely the new week that kicks off from today.

Nevertheless, bullish reports on the oil manufacturing company which also happens to be the country's largest diesel exporter have led it to trade sideways with the stock showing downward bias by a tad.

Brokerage houses like Motilal Oswal still see upside in the counter and still maintain a target price of Rs. 2874. This considering the last traded price of Rs. 2408, implies potential upside of over 19%. The brokerage in its report mentions that "aligning our assumptions for 2Q-3QFY23 would have raised the EBITDA of RIL by INR356b. However, considering the impact of duties, the EBITDA now increases by INR191b instead. We leave our RIL assumptions for FY24unchanged"

"As our valuation is based on FY24, numbers of which are broadly unchanged, we continue to reiterate our BUY rating on the stock, valuing O2C at 7.5x FY24E EV/EBITDA, digital at 19x EV/EBITDA and core retail at 39x FY24 EV/EBITDA. We have a target price of INR2,874 for RIL. Key risk would be non- reversal of the duties even after normalization of the refining margins", adds the brokerage.