RIL up 4.7% after target price raised

The rally has also propelled the company to cross the Rs 4 lakh cr market capitalisation

Shares of Reliance Industries Limited (RIL) gained as much as 6.5 per cent  on Monday after global brokerage Morgan Stanley raised its 12-month target price by 17 per cent to Rs 1,506. 

Shares of RIL closed at Rs 1,238.6, up Rs 56 or 4.74 per cent. The target price given by Morgan Stanley is close to 21 per cent higher than the current share price of RIL.

This rally on Monday took the total surge in the stock to 13.7 per cent since February 21, when the Mumbai-based company announced its rate plans for its newly found telecom subsidiary Reliance Jio. 

The rally has also propelled the company to cross Rs 4-lakh-crore market capitalisation (m-cap).

At Monday’s close price, the m-cap of Reliance is Rs 4.01 lakh crore, the second most for an Indian company after software gaint Tata Consultancy Services (TCS), Rs 4.9 lakh crore.

In the report, Morgan Stanley said RIL had underperformed its peers in the last four years by 60 percentage points and the trend would change now as it starts to realise its earning from both energy projects and telecom venture. 

The report also said, after nearly doubling its energy business investments in the past four years, RIL’s energy earnings are poised to benefit from slowing oil oversupply, a rising global gas glut, and the start of a polyester upcycle.

"We think the ability to leverage these trends sets RIL apart from its global peers and drives our conviction that energy earnings can beat consensus (estimate) by 12-23 per cent," Morgan Stanley report said.

On February 21, RIL had announced its rate plans for Reliance Jio starting April 1. Until now, the services offered by Jio have been free of cost. During the announcement, Mukesh Ambani, chairman, RIL, said Jio had crossed 100-million customer mark.