Buy Reliance Industries, target of Rs 3196: IndiaInfoline

IndiaInfoline has maintained its but rating on Reliance Industries with a traget price of Rs 3196 in its April 22, 2008 research report. "Reliance Industries' net sales were up 35.8% driven by higher realizations across the segments. The company's GRMs were at USD 15.5 per barrel for Q4 FY08, much in line with expectations. OPM were down by 270 bps to 16.1% as petchem and oil and gas EBIT margin fall. Three additional discoveries were made in Q4 FY08."

"We maintain our BUY call on the stock with a sum of parts target of Rs 3196 providing an upside of 21%. Although petrochemical segment is likely to witness margin pressures in the near term, the integrated nature of the segment will help RIL post a relative strong performance in the downtrend. Refining segment is expected to stage a strong performance as GRMs are likely to remain firm for reasons mentioned above. With RPL slated to commence operations before the scheduled date of December 2008, contribution from refining segment will increase considerably. KG D6 is all set to commence production from 2H FY09. This will provide further trigger to earnings growth," says IndiaInfoline research report.

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