NEW DELHI: Shares of Reliance Industries (RIL) dipped more than 1 per cent in early trade on Thursday after the global brokerage firm Jefferies cut target price for the stock to Rs 880.The brokerage looks not so confident on the stocks prospects and sees a potential downside of 32 per cent from current levels.The scrip was trading 1.04 per cent down at Rs 1,281 in early trade, while the benchmark BSE Sensex was down 0.12 per cent at 38,675 at around the same time.The stock has added more than Rs 2 lakh crore to its market capitalisation this year, with half of it in the last one month or so due to its strong June quarter result and renewed optimism in its consumer services businesses.
The companys market capitalisation surpassed Rs 8 lakh crore recently, making the most valued company in the country.telecom sub momentum is strong with RMS (revenue market share) also up 275bps (basis points) qoq (quarter on quarter) to 21.9 per cent in 1QFY19 (April-June).
This will reflect in rising EPS (earnings per share) too, even if they lag consensus, but capital spend trends should also be sobering too with net liab.
(liability) trending higher than most expect, said Jefferies.
The firm expects Reliance Industries refining margins to ease from highs of the 2017-18 financial year as refining demand supply becomes less benign.
RIL snapped its eight-session gaining streak on Wednesday, ending down 1.8 per cent at Rs 1,294.45 after hitting a record high of Rs 1,328.75 during the session.
Reliance Industries shares have gained 40 per cent so far in 2018, beating the benchmark Nifty index which has gained 11 per cent in the same period.Of late, brokerage firm Kotak Institutional Equities gave a sell rating on Reliance Industries with a target price of Rs 985.
Kotak said a reverse valuation exercise suggests investors have not only priced in a robust energy segment performance in RILs current valuation, but has also ascribed the enterprise value (EV) of leading players in key sectors that are being targeted in RILs diversification overdrive Bharti Airtels India business (telecom), Avenue Supermarts (retail), Flipkart (e-commerce) and key players in the media space (content ecosystem).
In June quarter, as much as Rs 36,581 crore of RILs consolidated income of Rs 1,41,699 crore came in from retail, telecom and media businesses.
It helped the company report a record net income Rs 9,459 crore, which was 17.9 per cent higher than that of previous years.