Reliance Industries Ltd (RIL) share zoomed over 6% today after global brokerage Jefferies said it saw a 50 per cent upside in the refiner's earnings before interest, tax, depreciation and amortisation (EBITDA) for petrochemical business if the prevailing momentum sustains. Reliance Industries scrip took Nifty to record high after the index heavyweight ended 5.90% or Rs 116.70 higher at Rs 2,094.90 on BSE.
The stock was the top gainer on both Sensex and Nifty. On Sensex , RIL share ended 5.99% higher at Rs 2,094.95.
The share touched an intraday high of Rs 2,105 rising 6.41% against previous close of Rs 1,978 on BSE.
Reliance Industries share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 42.25% in one year and risen 5.56% since the beginning of this year.
Market cap of the firm rose to Rs 13.28 lakh crore on BSE. The large cap stock hit 52-week high of Rs 2368 on September 16, 2020 and 52-week low of Rs 1,450 on May 28, 2020.
Total 21.58 lakh shares changed hands amounting to turnover of Rs 445.77 crore today.
A sustained strong performance by the petrochemical vertical will improve the likelihood of oil-to-chemical (O2C) business stake sale in FY22 and may lead to a reversal of the 40 per cent underperformance in the Nifty pack, the brokerage said.
Jefferies has set the base target of the RIL stock at Rs 2,580 level. It suggested an upside scenario target of Rs 3,150, a 59 per cent rise over Thursday's closing price.
Jefferies said polymer spread for the oil major is at decade-highs due to strong downstream demand.
Polyester chain spreads, which are well below decade highs due to large capacity addition, are also recovering gradually, the foreign brokerage said. Polymers comprise 45 per cent of its petchem portfolio.
"Petchem EBITDA could be 50 per cent ahead of Jefferies estimates if current spreads sustain in FY22E. This could drive 14 per cent upside to our consolidated EBITDA estimates. Sustained strong performance increases the likelihood of the O2C transaction, in our view," it said.
"At the current stock price, valuing the Energy business at long-term average multiples, we are left with Rs 1,150 per share as imputed value of RIL's stake in Jio and Retail. This is in line with the valuation offered by PE funds that bought stakes in Jio and Retail in Q1FY21. In our view, sustained strong petrochemical performance improves the likelihood of O2C stake sale in FY22. This could lead to a reversal of the 40 per cent Nifty underperformance," the brokerage said.
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