Reliance Industries (RIL) is trading higher by 2.5% at Rs 885, extending its Friday’s nearly 4% rally, after the Cabinet Committee of Economic Affairs (CCEA) has announced to raise gas price to $8.4/mmbtu effective April 1, 2014 for a period of five years.
The stock is currently trading at its highest level since February this year on the National Stock Exchange (NSE). A combined 2.53 million shares have changed hands on the counter till 1249 hours on NSE and BSE.
The hike in gas price is EPS accretive for upstream state-owned companies even after raising their subsidy burden estimates. Also, it is positive for private gas producing companies such as RIL, says analyst at Angel Broking in a note.
The broking firm raises RIL’s EPS by 6.8% for FY2015 and believes that the increase in gas volumes from KG D6 block will be a key catalyst for RIL hereon.
Gas production from KG D6 block has declined to 18-19mmscmd (against targeted 80mmscmd).
The stock is currently trading at its highest level since February this year on the National Stock Exchange (NSE). A combined 2.53 million shares have changed hands on the counter till 1249 hours on NSE and BSE.
The hike in gas price is EPS accretive for upstream state-owned companies even after raising their subsidy burden estimates. Also, it is positive for private gas producing companies such as RIL, says analyst at Angel Broking in a note.
The broking firm raises RIL’s EPS by 6.8% for FY2015 and believes that the increase in gas volumes from KG D6 block will be a key catalyst for RIL hereon.
Gas production from KG D6 block has declined to 18-19mmscmd (against targeted 80mmscmd).
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