Buy Reliance Industries, target price Rs 2250: Motilal Oswal

Reliance Industries Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 888878.30 Crore) operating in Diversified sector.

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Promoters held 49.2 per cent stake in the company as of June 30, 2020, while FIIs held 26.6 per cent, DIIs 13.5 per cent and public and others 10.8 per cent.
Motilal Oswal has given a buy rating to Reliance Industries with a target price of Rs 2250. The share price moved up by 2.58 per cent from its previous close of Rs 2161.25. The stock’s last traded price is Rs 2217.

Reliance Industries Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 888878.30 Crore) operating in Diversified sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 88253.00 Crore, down 35.22 % from last quarter Sales of Rs 136240.00 Crore and down -43.78 % from last year same quarter Sales of Rs 156976.00 Crore. The Company reported net profit after tax of Rs 12926.00 Crore in latest quarter.

RIL-graph

Investment Rationale
The brokerage estimates RRVL’s revenue/EBITDA CAGR at 21%/23% to INR2,405b/INR145b in FY22E. Of this, core revenue/EBITDA should contribute 53%/83% i.e. INR1,271b/INR121b. It maintains TP by assigning 30x/5x EV/EBITDA multiple to core/petro and connectivity EBITDA on FY22E. At this valuation, the implied share price of Reliance Retail would be INR664 v/s our TP of INR580 and would increase the current TP of RIL (INR2,250) by 4%.

Promoter/FII Holdings
Promoters held 49.2 per cent stake in the company as of June 30, 2020, while FIIs held 26.6 per cent, DIIs 13.5 per cent and public and others 10.8 per cent.

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