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RIL shares close near record high

LiveMint logoLiveMint 24-07-2017 Ravindra N. Sonavane

Mumbai: Reliance Industries Ltd (RIL) on Monday was trading near a record high, as investors continued to buy the stock on the optimism that its earnings may improve further after full commissioning of core projects and its aggressive entry in the feature phone segment.

The stock hit a record high of Rs1,624.80 a share. The last when RIL had hit its lifetime high was on 15 January 2008, at Rs1,626.05.

Reliance Industries (RIL) gained as much as 2.5% in intraday trade before closing at Rs1,616.10, 1.69% higher while India’s benchmark index Sensex closed 0.68% higher at 32,245.87 points. The company has added nearly Rs2 trillion in market capitalisation in the last five months and so far this year, it is the second best performing stock on the Nifty index, by gaining over 50.2%.

Currently, 23 brokers have “buy” rating on the scrip, 13 have “hold” rating and three have “sell rating, according to Bloomberg.

RIL on Thursday reported a 28% increase in its net profit to Rs9,079 crore on higher-than-expected refining and petrochemicals margins and a one-time gain. Revenue rose to Rs92,661 crore, an increase of 25.5%.

Gross refining margins was at $11.9 per barrel, while Petchem Ebit (earnings before interest and tax) increased considerably by 43.7% year-on-year to Rs4,031 crore, driven by capacity expansion and resilient margins. According to RIL, its June quarter petchem Ebit margin was at an all-time high to 15.8%.

“Petchem EBIT was driven by better spreads in polyester with higher volumes on back of addition in capacity of PX at Jamnagar and favourable feedstock economics with commencement of ethane cracking at Dahej and Hazira,” said Elara Securities India Ltd in a report to its investors.

On Friday, the company at its annual general meeting, launched a new smart-cum-feature phone with refundable deposit of Rs1,500 for three years and said that it is planning to raise population coverage of 99% by fiscal year 2019 from the current over 80%. Analysts expect that this would expand its subscriber base significantly from the current 125 million.

“The company has disrupted again by launch of 4G feature phone ‘JIO’ aimed to capture the feature phone market,” said Antique Stock Broking firm, in a report to its investors. “We expect launch of feature phones to increase Jio’s subscriber base faster than estimated earlier,” it added.

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