RIL Shares Still 14% Away From Their 52-Week Highs: What Should Investors Do?

Buy, Sell or Hold RIL Scrip?

Now for the investors in RIL or those who want to enter the scrip, is it the opportune time, here is what experts suggest:

RIL move defies overall market trend when market logged highs every other day

In September of 2020, the scrip of RIL hit its highest price of Rs. 2369.35 on September 16 and since then has corrected sharply. Now, what is interesting to note here is that ever since the US Presidential elections prompted the Indian markets to new high, it was the RIL stock that did not catch up.

Goldman Sachs suggest a ‘Buy’ call on RIL

And the brokerage and research firm has reiterated a buy recommendation on the scrip on the basis of multiple catalysts for the stock price up ahead.

“Amid the ongoing recovery, RIL Retail has significantly outperformed peers, with revenue continuing to grow despite lower footfall on-year,” the report said. RIL’s retail revenues are expected to grow further in the coming years with forecasted overall core retail revenue CAGR of 40%. “Within e-commerce, we forecast RIL’s online GMV will reach US$35bn in FY25E with a 31% market share,” Goldman Sachs said. Also other factors cited are stake sale in the company’s energy business, product launches in the e-commerce, augmenting margins in the energy vertical and also tariff increase for Jio shall propel a surge in the share price of RIL.

Refining margins could revive in the coming quarters from broader cracks improvement, widening light-heavy differentials from the middle of this year as OPEC production starts to come back, and benefits from the pet-coke gasification project, added the brokerage and research firm.

Target price and valuation

The base case target price of Goldman Sachs of Rs 2390 per share that implies an upside of 18% from current levels. “We continue to use 8X CY22E (FY23E) to value the chemical business and 6.5X for refining and marketing; we use EV/EBITDA to value the core refining and (petrochemicals) business, and we use DCF to value the high-growth telecom and retail business (online and offline),” the brokerage firm said.

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