Reliance Industries was the star performer in trade this week surging a huge 10 per cent. Here are 5 reasons why the stock surged 10 per cent during the week.
1) Upbeat on Reliance Retail
Reliance Retail has made profits at the operating level and investors are upbeat on the company's retail division going forward.
The firm intends to reach 900 cities by 2016. It plans to see solid annual compounded growth rate in the next few years. The retail business has got presence across categories including groceries, fashionwear, footwear, jewellery and electronics.
Analysts say that the company's price to earnings ratio based on the FY 2016 earnings is just 10 times.
This leaves a good scope for further re-rating in the stock as the price to book value is also just 1.1 times FY 2016 estimates.
3) Brokerage Upgrades
Leading brokerages like Credit Suisse, Nomura, Morgan Stanley and Jefferies are all bullish on Reliance and have revised their price target on the share upwards.
4) Stock under owned by FIIs
The Reliance stocks is under owned in terms of FII purchases and recent developments may trigger fresh buying in the Reliance stock.
5) Markets were awaiting news on Reliance Jio
Investors were eagerly awaiting news on Reliance Jio launch. Mukesh Ambani revealed during the 41st Annual General Body meeting that the services would be launched in Dec 2015.
This boosted the prospects for the stock as analysts believed this could be a game changer for the company.