RIL’s share price up 2%, Sensex’s top contributor on O2C biz hive news; Morgan Stanley sees 12% rally

The RIL share price jumped more than 2% to Rs 2,048.70 each on BSE on Tuesday, after the oil-telecom conglomerate announced the reorganization of its oil business to chemicals (O2C) into a independent subsidiary by the second quarter of the fiscal year22. RIL stock was the main contributor to BSE Sensex, fueling the index’s 400 point rally. So far, in February 2021, the Reliance Industries Ltd share price has gained 8%. While on a year-to-date basis (YTD), the RIL share price managed to gain 3 percent. Mayank Maheshwari, equity analyst at Morgan Stanley, said RIL’s plan to split off the petroleum to chemicals (O2C) business is a step toward monetization. The research and brokerage firm has rated Reliance Industries Ltd as “overweight” and is seeing a more than 12% rebound in the share price.

Also Read: Mukesh Ambani’s RIL Launches O2C biz Spin-Off, Awaits NCLT Approval By Q2 FY22

RIL’s next stage of expansion

Morgan Stanley also said the acceleration of RIL’s new energy and hardware plans led by Mukesh Ambani in batteries, hydrogen, renewables and carbon capture points to the next step of multiple expansion and clarity. on the next investment cycle. He gave a target price of Rs 2,252 each. So far during the day 1.33 lakh shares have traded on the BSE, while on the national stock exchange a total of 36.75 lakh shares have traded hands. With the reorganization of its petroleum-chemicals activity by the second quarter of the coming fiscal year, RIL will have four growth engines: digital, retail, new materials and new energies. As the market appreciates value for the top two companies, Morgan Stanley sees significant upside risk on earnings and multiples for O2C as RIL has invested in new energy / technology.

Reliance Industries: inventory discussion

Last year on March 23, 2020, RIL shares plunged to a 52-week low at Rs 868 amid a global sell-off of shares in the wake of the COVID-19 pandemic. It then hit a record high of Rs 2,369 apiece on BSE in September following a series of global investments in its digital and retail arm. However, the share price is still 13.5% from its lifetime peak. According to Morgan Stanley, execution on Jio Mart, increasing market share and reducing competitive intensity in the Indian telecommunications industry and improving core energy margins are among the main risks to the company. rise. While downside risks include a potential ban on single-use plastic that could hurt margins in the medium term, less use of recently launched downstream energy projects and a delay in monetizing its energy and telecommunications assets.