Reliance Stock : Jefferies Says 'Buy'

Reliance share and Jefferies's 'Buy' rating.
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Reliance has fallen 3% but has gained over 4.5% since the start of the year 2022 compared with NIFTY 50 which is down by 12% since the start of the year 2022. 

Most brokerage firms are weighing heavily on the company. Earlier this month, JP Morgan gave a buy call and now Jefferies Let us look at what is happening with the company.

Jefferies on Reliance

Jefferies has retained a BUY rating on the stock with the target at Rs 2,950 per share. The firm believes that the correction in the stock offers an opportunity adding that there are tailwinds to refining margin in CY22.

The reason for a high target is - multi-year low inventories, declining Russian exports, muted Chinese exports, lower diesel production in Europe, and delays in commissioning of ME refineries are tailwinds to refining margins in CY22.

In its report, the brokerage firm said that Reliance is a key beneficiary of energy inflation, with every $1 per barrel improvement in annualized refining margins, adding an estimated $400-450 million to RIL's consolidated EBITDA. Our initial estimates suggest RIL's oil-to-chemical business EBITDA could rise 60% in the quarter in Q1 this year and account for 35 percent of our FY23 estimate. Continued strength in refining should result in consensus FY23 earnings upgrades.

Reliance Fined for violating rules

  • Indian market regulator, SEBI, fined Reliance Industries and two of its compliance officers for violating fair disclosure norms during Facebook's $5.7 billion investment in its digital unit in 2020.
  • SEBI has said that Reliance did not disclose the deal even after newspaper reports in March 2020 published price-sensitive details about the imminent investment that led to a spike in its shares.
  • The regulator imposed a penalty of Rs 30 lakh on Reliance and the two compliance officers.

Buying out Revlon?

  • Revlon filed for bankruptcy last week after global supply chain disruptions drove up raw material costs and prompted vendors to demand upfront payments.
  • Reliance has been pushing its way into the fashion and personal care space in recent months as it diversifies away from its mainstay oil business.
  • As per media reports, Reliance is considering buying out cosmetics maker Revlon Inc. However, there is no official confirmation as of now from either party.
  • In the last 5 days, Revlon Inc's shares have surged 293%.

Check out the Reliance share price today

Analysts Review For Reliance Stock

Analysts in general are bullish regarding RIL amid increased revenue outlook from the refineries and upstream gas business as well as customer technologies’ businesses’ valuation holdings. We have done a detailed report of Analysts Review here.

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