Monetisation of telecom, retail investments holds the key; see RIL @ 1,200: Jaideep Goswami

Reliance Industries in its 41^st annual general meeting (AGM) said that Reliance Jio will commence its commercial operations from December 2015. In a chat with ET Now, Jaideep Goswami, Head - Institutional Equity, ICICI Securities, talks about what potential upside the stock holds.

ET Now: Irrespective of the Friday’s annual general meeting (AGM), do you think there is money to be made in Reliance Industries? The commodity cycle is not with us, but petrochemical margins for RIL have gone up, Reliance Jio launched in retail business.

Jaideep Goswami: What the company does with Reliance Jio holds the key for the stock. The concerns seen on the counter so far are largely due to company's investment in the telecom space. It is to be seen how the company is going to generate returns from this investment under the competitive telecom industry. But having said that, there is an improvement in margins in refining business; there is capacity expansion in petrochemical business as well. So, there are high expectations of decent earnings growth in the core business.

ET Now: So at Rs 900 are you a buyer in Reliance Industries?

Jaideep Goswami: We have a positive recommendation on the stock.


ET Now: What is your target price?

Jaideep Goswami: Rs 1,200 apiece.

ET Now: Why?

Jaideep Goswami: The target price is essentially driven by the likely earnings growth we see over next two-three years. Overall, the most important thing would be the company’s plans to monetise the investments made in telecom and retail businesses.