As the stock achieves a new high, Reliance Industries (RIL) is 'burning on all cylinders.'

  • April 21, 2022, 12:13 p.m.

Reliance Industries' stock has been gaining momentum since the past few sessions and has gained about 7% in the last five trading sessions as compared to a 2% fall in the benchmark Sensex. Shares of index heavyweight Reliance Industries Ltd (RIL) hit a fresh all-time high level by surging more than 2% to 2,775 apiece on the BSE in Thursday's early deals, supporting the benchmark indices. RIL's market capitalization stood at over 18.7 lakh crore on the BSE.

Global brokerage Morgan Stanley has raised its target price on the RIL stock as it believes hydrogen adoption plans are quickly progressing, with Reliance Industries best positioned to capitalize.

"The company is poised to give good gross refinery margins in this quarter and refining tailwinds will sustain in the medium term. Both retail and telecom businesses are performing well, so we can say that reliance is firing on all cylinders, "said Santosh Meena, Head of Research, Swastika Investmart Ltd. 

RIL has spent around $1.5 billion to acquire technologies across the solar battery and hydrogen eco-systems and has outlined its plan to foray into new energy solutions through four Giga factories: integrated solar photovoltaic factories, advanced energy storage, electrolyzer manufacturing facility, and fuel cells. 

"The company is expected to generate good cash flows, which will help the company to transform its traditional energy business into a new modern green and clean energy one. Due to the above factors, RIL's share price has recently outperformed the index and is expected to give good returns in the medium to long term, "Meena added.

Improving GRM in the petrochemical business, aggressive focus on retail business and soaring crude oil prices in the spot market are expected to improve the Mukesh Ambani-led conglomerate's margins in the upcoming quarters, as per Astha Jain, Senior Research Analyst at Hem Securities.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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