Analysts said the market is willing to offer higher valuations to co because of a shift in business focus.
“Reliance is becoming more of a technology and supermart play. It is no longer an energy play,” said Sanjiv Bhasin, director, IIFL Securities. “Return on capital will be strong as they are looking to sell energy assets. The Aramco deal is likely to happen in the next six months. The stock is likely to rise to Rs 1,850-2,000 level by December,” said Bhasin.
Reliance has turned net debt-free by raising Rs 168,818 crore in two months through the country’s largest ever rights issue and a series of stake sale deals in its arm Jio Platforms.
Reliance shares have doubled from their March lows. While the Sensex is down 16 per cent from the start of 2020, Reliance is up 17.66 per cent.
“Incremental catalysts would come from the listing of Jio and the retail business. We also need to see how the tech story unfolds over the next couple of years. The retail business could also see strategic investors coming in,” said Rajiv Sharma, head of research at SBICAP Securities.
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