Healthy outlook: Jefferies maintains buy on RIL, citing rising demand
The sustained petrochemical performance of Reliance Industries (RIL) improved the likelihood of O2C divestiture in fiscal 22, financial services firm Jefferies said.
As a result, Jefferies maintained the “buy” call on RIL with a target and Rs 2,580 or 30 percent on the rise.
“In the current share price, valuing energy activity at long-term average multiples, we have Rs 1,150 per share left as the imputed value of RIL’s stake in ‘Jio’ and ‘Retail’,” said Jefferies in a report.
“This is in line with the valuation proposed by the PE funds which bought stakes in Jio and Retail at 1QFY21.”
In addition, the report pointed out that a strong, sustained petrochemical performance improved the likelihood of O2C shares being sold in FY22.
“This could lead to a reversal of Nifty’s 40 percent underperformance. Our PT (2,580 rupees) is up 30 percent.”
On the take-off front, the report says that continued strength in demand for budget support in major economies, delays in commissioning new projects, and vaccination penetration are expected to support polymer margins over the course of the year. exercise 22E.
“(Polymer) demand is supported by strength in downstream industries, namely autos, durable goods, consumer goods, medical supplies and packaging. Consumer spending in the United States and China remains strong , for example, the container rate between China and the United States is 50% higher than previously decade high, China imports to 1QCY21 up 55 percent from 1QCY19. “
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