Reliance Industries zooms 5% on Morgan Stanley’s bullish outlook; m-cap tops Rs 8 lakh crore
The stock was the largest contributor to Sensex, lifting the index by 150 points intraday.
By ETMarkets.com | Updated:
BCCL
NEW DELHI: Shares of Reliance Industries surged as much as 5 per cent on Tuesday after global brokerage Morgan Stanley said the company’s earnings growth is set to get a boost from better refining margins, lower tax rate and cheaper gas feedstock costs.
The stock was the largest contributor to Sensex, lifting the index by 150 points intraday.
The surge in shares boosted the company’s market capitalisation by Rs 31,000 crore in a day to above Rs 8 lakh crore again, eclipsing TCS, whose m-cap has dropped below the said level. The Mukesh-Ambani firm is now most valued company in India.
“Rising clarity on 2020 growth; top pick in south Asia: RIL's earnings growth is starting to be de-risked as headwinds of 1H19 turn and become key tailwinds in 2020," the brokerage said.
As one of the most complex refiners, RIL should be the biggest beneficiary in Asia from International Maritime Organization (IMO) regulations that from January 2020 bar use of fuel with more than 0.5 per cent sulphur in ships. This will lead to a rise in diesel demand.
Morgan Stanley sees a 400 basis point reduction in the consolidated tax rate RIL paid in FY19. Reliance businesses paid taxes at the rate of 29-35 per cent, much higher than the new corporate tax rate of 25.2 per cent.
The shares of the company closed 3.22 per cent higher at Rs 1278.55 on BSE.
The stock was the largest contributor to Sensex, lifting the index by 150 points intraday.
The surge in shares boosted the company’s market capitalisation by Rs 31,000 crore in a day to above Rs 8 lakh crore again, eclipsing TCS, whose m-cap has dropped below the said level. The Mukesh-Ambani firm is now most valued company in India.
“Rising clarity on 2020 growth; top pick in south Asia: RIL's earnings growth is starting to be de-risked as headwinds of 1H19 turn and become key tailwinds in 2020," the brokerage said.
As one of the most complex refiners, RIL should be the biggest beneficiary in Asia from International Maritime Organization (IMO) regulations that from January 2020 bar use of fuel with more than 0.5 per cent sulphur in ships. This will lead to a rise in diesel demand.
Morgan Stanley sees a 400 basis point reduction in the consolidated tax rate RIL paid in FY19. Reliance businesses paid taxes at the rate of 29-35 per cent, much higher than the new corporate tax rate of 25.2 per cent.
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The shares of the company closed 3.22 per cent higher at Rs 1278.55 on BSE.
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