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Reliance gains over 2% after Goldman hikes target price to Rs 1,205; sees upside of 25%

November 21
22:06 2017
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Reliance Industries (RIL) gained over 2 percent after Goldman Sachs hiked the target price to Rs 1,205 from Rs 960, implying an upside of over 25 percent.

The global research firm highlighted that the company provides the best large-cap downstream energy exposure in Asia. Further, it expects operating income to double to $ 14 billion in the financial year ending March 2020.

Among positives for the stock, the firm believes volume-led growth with capex cycle completion, refining margins to outperform peers and telecom business will start contributing positively.

Going forward, petchem will be the key driver of growth over the medium term while refining earnings will remain stable, the firm said in its report.

In terms of other segment, it said that Jio, which will start contributing from the next financial year, can reach operating income of over $ 5 billion by March 2025.

With capex intensity declining, it expects free cash flow to turn positive after five years with a yield of 6 percent in the next financial year.

The company on Tuesday raised USD 800 million by selling 10-year bonds – the first offering since Moody’s raised India’s sovereign rating.

The bonds were priced at 3.66 per cent, the lowest coupon ever achieved by an Indian corporate for a 10-year issuance, the company said in a statement.

RIL, which is rated the same as the sovereign, will use the proceeds to refinance existing debt. This was the first dollar note this year.

At 13:18 hrs Reliance Industries was quoting at Rs 934.95, up Rs 16.10, or 1.75 percent, on the BSE. It touched an intraday high of Rs 939.70 and an intraday low of Rs 924.00.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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