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Buy Reliance, target price Rs 1,748: Angel Broking

The brokerage expects the retail business to be a key value driver for Reliance over the long run.

ETMarkets.com|
Last Updated: May 29, 2020, 02.54 PM IST
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Angel Broking has given a buy rating to Reliance Industries with a target price of Rs 1,748.

Reliance Industries Ltd. (RIL) is India’s largest company with a dominant presence in refining, petrochemicals, telecom and retail businesses. The telecom business to witness robust growth over next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players.

Investment Rationale


RIL has built up a dominant telecom business and has already attained market leader status with 38.5 cr. subscribers at the end of Q3FY20. Telecom business to witness robust growth over next few years due to tariff hikes and shift of subscribers from Vodafone Idea to other telecom players. RIL has also built a very strong retail business which is the largest organized retailing company in India. The brokerage expects the retail business to be a key value driver for Reliance over the long run though there would be some impact on business in FY21 due to the Covid 9 outbreak.
While the refining and petrochemicals business would be a stable low growth business for RIL going forward, it will be a major cash generator for the company as there will be negligible capex requirements. The cash flows would be used to fund expansion into other businesses.

Financials

For the quarter ended March 31, 2020, the company reported consolidated sales of Rs 136240.00 crore, down -11.06 per cent from last quarter sales of Rs 153179.00 crore and down -2.40 per cent from last year's same quarter sales of Rs 139590.00 crore. The company has reported net profit after tax of Rs 6575.00 crore in the latest quarter.

Promoter/FII Holdings

Promoters held 48.9 per cent stake in the company as of December 31, 2019 while FIIs held 26.3 per cent, DIIs 13.6 per cent and public and others 11.2 per cent.
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