Bank of America-Merrill Lynch maintains 'Neutral' rating on Reliance Industries Ltd

Bank of America-Merrill Lynch has maintained its 'Neutral' rating on Reliance Industries, mainly due to the -buy-back programme which may support the share price.

BoA-ML expects RIL's earnings to be flat in FY13 and EPS CAGR in FY08-13 to be just 6%, which is much lower than EPS CAGR of 36% in FY03-08.

RIL will generate strong free cash flows and turn net cash for the first time in its history by the end of the current year. RIL has not made any significant discoveries in the past few years and has been hit by production problems, which has led to a de-rating of E&P.

However, it has large unexplored prospective acreage and thus, has large reserve accretion potential. BoA-ML has cut the target price to 831 per share from 844 per share earlier.