Share to buy to become rich: Why experts are betting big on Reliance Industries (RIL) stock

On account of strong performance in petrochemicals, Jio and retail segment, reliance industries stocks are expected to give a better return for the Indian market investors, say experts. They are expecting around 17-18 per cent gain in the Sensex major that holds around one-sixth of the net Sensex strength.

Commenting upon the RIL stock rally Aditya Gupta, Research Analyst at Narnolia Financial Advisors Ltd told Zee Business online in a written statement, "Reliance is continuously performing better on the back of strong performance in petrochemicals and retail segment. Going forward, petrochemicals business which contributes about 30% of the total revenue is likely to grow in double-digit on the back of successful stabilization of the world’s largest ROGC." He went on to add that in the retail business, the company is actively acquiring market share in organized retail chain by opening around 130-140 new retail outlets in every quarter. In Jio business, the company is aggressively expanding is
subscriber base by keeping lower tariffs. The company plans to maintain its growth momentum ahead with target network coverage of 99% by Mar’19.

"Considering robust growth in petrochemical segment and organized retail business along with momentum in Jio, we maintain a positive view on Reliance and expect Revenue and PAT to grow at 34 per cent and 12 per cent CAGR respectively over FY18-20E," said Aditya of Narnolia Financial Advisors. On what he recommends to the equity investors in reagad to RIL stock Aditya told, "I recommend to buy the stock for target of Rs 1351." Shares of RIL are currently at around Rs 1150, which means an investor can expect around 17 per cent gains on his investment in the RIL stock.

Standing in sync with Narnolia Financial Advisors; Gagan Dixit, Equity Analyst at Elara Securities told Zee Business online in a written statement, "Reliance Industries (RIL IN) reported a standalone net operating income of Rs 1001 bn (less excise), up 37 per cent YoY, driven by stability in crude prices and petrochemical production. EBITDA stood at Rs 145 bn, up 6 per cent YoY due to ramp-up of refinery-off gas cracker (ROGC) and strong polyester chain margins, partially offset by lower GRM. Standalone PAT came in at Rs 89.3 bn, up 6 per cent YoY, beat our estimate of Rs 87.9bn. Consolidated PAT grew 9 per cent YoY to Rs 103bn, due to higher earnings from petrochemical, retail and Jio." Elaborating upon the Jio performance Dixit added, "Jio additions were robust with gross addition of 32.7 mn.  ARPU (average Revenue Per User) was flat QoQ and down 16 per cent YoY at Rs 130. EBITDA margin improved QoQ at 39 per cent. Management expects strong subscriber additions will continue in future." 

Asked about his advise on RIL for market investors Gagan Dixit of Elara Securities told, "We recommend investors to buy RIL stocks with our revised target price of Rs 1333." Initially, Elara Securities research team had recommended to buy the RIL stock for the target of Rs 1372.

Asked about the future prospect of RIL stock Simi Bhaumik, Technical Equity Analyst (officially registered with SEBI) told Zee Business online, "Technically the stock looks strong and can show Rs 1270 to Rs 1310 by end of current quarter. I would recommend the market investors to take a buy position in the stock with strict stop loss at Rs 1190."