Reliance Industries stock has been trading in a range for sometime now and saw the correction last week after its 44th AGM in which the company's chairman Mukesh Ambani boasted of the firm's robust financial performance. Also, on the sidelines he said that the Saudi Aramco deal shall happen this year.
Now, global research firm views RIL stock to even gain 50% in a year's time. This the firm expects in the most bullish scenario and amid a situation if these aspects stand out for the conglomerate entity.
Furthermore in the base case situation, Jefferies see the price of RIL to scale to Rs. 2540, an upside of 22 percent while in the bear case it sees a downside of up to 11 percent to Rs. 1850. Last the stock of RIL traded higher by a tad at Rs. 2111 per share.
5 Triggers or Grounds listed by Jefferies which will propel bull run in RIL scrip are:
1. Completion of company's O2C business and Saudi Aramco deal
2. Gross refining margin (GRM)s show recovery ahead of their estimates
3. Listing of the company's Jio business that will provide for re-rating of the company's valuation multiple
4. Reliance Retail, the company's retail arm gets a good hold of the market at a rate better than anticipated.
5. Traffic increase for Jio in case of consolidation in the telecom space.
Jefferies take on RIL scrip
" Given the early stage nature of the technology, RIL's portfolio strategy for the renewable (RE) can ensure its success. The government policy support for RE and capital subsidy schemes would improve the investment economics, said equity analyst at Jefferies.
The company's diversified businesses offers a wide market to cater to. Reliance Retail that encompasses e-commerce and Jio Space are new business lines that will enable the company to expand and scale up. Similarly the partnership with Google and Facebook will also be a positive for the company.