State-run insurance major stocks up on RIL, Sintex

A state-run insurer is taking a contrarian bet on Reliance Industries ahead of the company's third quarter earnings, which is widely perceived to be weak.

Contrary to the general consensus that the company's gross refining margins could be subdued this quarter, the insurer is betting that the ratio may not be as bad as analysts forecast.

According to a Mumbai-based broker, the insurance company is buying Reliance also on expectations that demand for gas will grow nearly 10% over the next three years.

In addition to Reliance, the insurer has also been accumulating shares of plastic product manufacturer Sintex Industries. Sintex may be more of an opportunistic buy for the insurance company.

Analysts tracking Sintex expect the company to post poor December quarter earnings on account of forex losses.

"Sintex has been over-sold, citing forex losses as the reason," the broker said.

Shares of Reliance Industries ended over 2% higher at 723.70 on the BSE while Sintex closed gained over 3% to close at 67.45 on the BSE.