Sell RIL above 1100

Reliance Industries, which has just acquired pan-India spectrum for wireless broadband services, expects its latest bet to pay for itself within three years from operation. A senior RIL official, Mr Manoj Modi, said this on Saturday, at a presentation for analysts in Mumbai. He pegged the total investment into the broadband venture at $5 billion. He also denied any intention of purchasing any of the existing 2G telecom players. RIL’s CFO Mr Alok Agarwal was also present at the meeting.

On Friday, RIL took everyone by surprise when it announced a Rs 4,800 crore bid to acquire a 95 per cent stake in Infotel Broadband. Infotel was the surprise winner of the broadband auction that had concluded hours earlier. The company will be following an “asset light” approach in its latest business — meaning it may go for external partners for infrastructure, applications etc.

RIL sees the broadband business as the next big opportunity in the telecom sector. In its presentation on Sunday, RIL says that broadband business in India is at the same stage today that mobile telephony was in 1995 – in terms of consumer spread. Penetration of broadband is less than 1 per cent, compared to 130 million subscribers in China. The company feels growth is likely to happen through wireless telephony — rather than fixed line wireless phones. The company expects subscriber figures to grow over 100 per cent per annum for the first few years. Data accounts for a large share of revenues for telecom firms globally, but the share is less than 10 per cent for top Indian telecom firms such as Bharti and Vodafone.

Infotel is the second major acquisition by RIL in the recent past. In April, RIL had acquired a stake in the US natural gas company for $1.7 billion. Last year, it was in the running for LyondellBasell, a global petrochemicals giant. In the past few quarters, expectations that Reliance will go for takeovers and acquisitions have risen.

Our Analysis :

RIL has been struggling to get past the 1100 mark and have a weekly close above that. We feel the telecom buy is a long term strategy and broad band will take time to grow unlike the mobile telephony. With intense competition the margins will be under squeeze. Advise investors with brave heart to short above 1100 keeping a stop loss of 1125, as a steep fall awaits the counter which could bring it down to sub 1k levels in the short term.

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Reliance Industries Sell on rise

Friends,

I have radically different view on RIL bonus.

This is a deadly blow for Indian Stock Markets. Look at the sequence of events -

RPL merged with RIL - increase in equity shares

RIL issues 1:1 bonus - increase in supply of shares

Xbonus the share will languish sub 900 levels or below that for quite sometime. It has already underperformed broader sensex and nifty for last 1 year and is not going to go up in the near future. In my view RIL is a good buy only after a year or so not before !!

With its heavy weight age on both the NSE and BSE will under-perform due to the decision of RIL to do all the above ;-( With RIL not supporting Indian Stock market cannot scale new heights in a hurry ! Other shares do not have strength to make good for the pull down by RIL.

Love to hear any logic which is against the above views.

Raghav

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SP Tulsian of sptulsian.com said the announcement came as a welcome surprise. He said that the move was acalculated one. “The Reliance family has about four million share holders of which 3 or 3.5 million are common shareholders. I think this is the capitalizing on winning the confidence of the RIL shareholders family because this is now the support mobilization at all levels by both the brothers whether this is the shareholders or of the bureaucracy or the judiciary or maybe analysts etc, so basically this seems to be a calculated move on the part of RIL that okay this has been due or a long overdue demand so lets award them with 1:1 bonus.” Jigar Shah Senior Vice President at Kimeng Sec India said given that this year was a consolidation year for the company as earnings from its refining business were lower and the company’s overall earnings growth would be subdued, the bonus was a good incentive for share holders to retain their shares and reward share holders who have been with the company for the longer term. He said that the stock would now see a shorter term boost however, he added, “I don’t think this will have any more than temporary sentiment impact.” “We are maintaining our target of Rs 2050 for the year and we will review it after the Q2 earnings and also what happens with the ongoing case.” Amitabh Chakraborty, President – Equity, Religare Securities said the 1:1 bonus was totally unexpected. “In my mind, what has happened is that there was a negative sentiment attached to the treasury stock sale because normally that gives negative signals. But now this is a positive signal. Bonus is always taken very positively by the retail side of the market. So, I think this bonus announcement will compensate and I think retail will be quite enthused with this bonus issue.” He expects the market to be enthused by the news in trade tomorrow. from Money Control.com

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TA - Reliance Industries

Reliance

RIL moved sideways between Rs 1,700 and Rs 1,800 last week.

Though it declined to Rs 1,670 on Tuesday, it recovered to close on an optimistic note.

As explained in our last column, the stock faces strong resistance in the band between Rs 1,800 and Rs 1,850 and a medium term reversal is possible from here.

But if RIL holds above Rs 1,600 over the next two weeks, there can be another leg of up-move that can take the stock higher to Rs 1,886 or Rs 2,020.

Next Fibonacci retracement level if RIL breaks past Rs 1,850 is Rs 2,100.

Short-term traders can hold the stock with a stop at Rs 1,660.

Swing traders can hold with a deeper stop at Rs 1,580.

— Lokeshwarri SK

businessline 26-04-09

Reliance Industries has touched a low of Rs.1150 and from that point has just jumped close to 45% Right now it is consolidating and may correct a bit in the short term.  Long term investor should look for buying around Rs.1500-1550 levels for a target price of Rs.2100-2200 for a holding period of 1 year.

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Reliance Buy above Rs.1800 target Rs.2000

Reliance

There was no let-up in the bullish fervour on the RIL counter and the stock closed the week with a strong 4 per cent gain. It also held steadily above the 200-day moving average and moved past our first short-term target to an intra-week peak at Rs 1,768. RIL can move higher to Rs 1,786, Rs 1,920 or Rs 1,965 in the short-term, but negative divergences in the daily oscillators calls for caution in the short-term. Traders can buy in declines as long as RIL holds above Rs 1,600. Next support is at Rs 1,500.

The stock is already moving close to our medium-term target at Rs 1,825. A reversal from here will translate into a broad range between Rs 1,100 and Rs 1,800 for the ensuing months. Strong break beyond Rs 1,825 is needed to pull it to Rs 2,040.

Lokeshwarri S. K.

businessline 12-04-09

Our View :

Buy above Rs.1800 target Rs.2000

Reliance after a steep jump in the past 4 weeks is pausing for direction.  Returns over a

1 Week : 13.84%      

1 Month : 50.96%      

3 Months : 38.35%      

1 Year : -24.98% 

The KG6 gas effect has taken it higher driven by news.  With a drop in the daily volume we can expect a mild correction.  Buy on dips, the following data will help you to buy at appropriate levels -

PIVOT - 1986.68, 1924.08, 1861.48, 1798.88, 1767.32, 1736.28, 1704.72, 1673.68, 1611.08 , 1548.48, 1485.88 

FIBONACCI- 1837.57, 1815.91,1798.88, 1774.97, 1760.20, 1736.28, 1712.37, 1697.60, 1673.68, 1656.66, 1635.00

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Technical Analysis - Reliance Industries

RIL moved past our first medium-term target to record an intra-week peak at Rs 1,679. Next medium-term target for this stock is around Rs 1,825. The medium-term up trend from the March 6 trough can end here since it occurs at 38.2 per cent retracement of the entire down-move from the January 2008-peak. But if RIL gets past this level, the rally can go on to Rs 2,040. Investors should hold the stock with a stop at Rs 1,480. The short-term trend in RIL is up and the shallow corrections since the first week of March indicate a strong bullish undercurrent. Short-term resistances will be at Rs 1,752 and Rs 1,813. Short-term support would be at Rs 1,575 and Rs 1,497. Source : businessline

Technical Analysis - Reliance Ind

Reliance Industries surged strongly to a 15 per cent weekly gain, shattering the resistance at Rs 1,400 as well as Rs 1,500 with ease. The medium-term view has turned positive with the weekly close above Rs 1,500.

The sideways move between Rs 1,000 and Rs 1,400 since October 2008 appears to be a terminal corrective. Medium-term targets for the stock have now been revised upwards to Rs 1,647 and Rs 1,820. Caveat: these targets are achievable only if the stock holds above Rs 1,500 over the next couple of weeks.

RIL paused just below its 200-day moving average on Friday. A correction can now ensue that takes the stock lower to Rs 1,400 or Rs 1,330. Traders should avoid fresh longs on a decline below Rs 1,380.

Lokeshwarri S. K.

Stock Recommendation - Reliance Ind Buy

Reliance Industries: 

Reliance’s stock has troughed at 0.8-0.9x P/B in each of the last three downcycles in refining and petrochems after adjusting book value for revaluations and changes in depreciation policy. Using a similar multiple and adding the value of only its known upstream resources indicates a SOTP of ~Rs1,125/share; this may be a gauge for a relatively safe entry point. With the stock trading only 10% higher, though, we perceive favourable risk reward even at current prices. Reliance’s 25% 2-year EPS Cagr also makes valuations (12.5x Mar09 PE) reasonable. 

BUY.

Do not buy on a day when the indices are up buy only on a day when the market tanks or weak

Do not buy the entire lot one day, stretch your buying and place orders with limits.

Levels to Watch out for

Support 1 - 1200

Support 2 - 1140

Resistance 1 - 1350

Resistance 2 - 1442

RIL tumbles

Reliance Industries tumbled 4.60% to Rs 1326.10 at 12:50 IST as the government did not re-introduce the anticipated seven-year income-tax holiday for natural gas producers.


Meanwhile, the BSE Sensex was down 326.28 points, or 3.39%, to 9308.61.
On BSE, 10.05 lakh shares were traded in the counter. The scrip had an average daily volume of 23.66 lakh shares in the past one quarter.
The stock hit a high of Rs 1395 and a low of Rs 1320.10 so far during the day. The stock had a 52-week high of Rs 2706.60 on 5 May 2008 and a 52-week low of Rs 930 on 27 October 2008.
The stock had outperformed the market over the past one month till 13 February 2009, rising 28.68% as compared to the Sensex's 6.21% rise. It had also outperformed the market in the past one quarter, rising 19.69% as compared to the Sensex's rise of 1.03%.
India's largest private sector company by market capitalization and oil refiner has an equity capital of Rs 1573.80 crore. Face value per share is Rs 10.
The current price of Rs 1326.10 discounts its Q3 December 2008 annualised EPS of Rs 88.97, by a PE multiple of 14.90.
External Affairs Minister Pranab Mukherjee, currently in charge of the finance ministry, presented the interim budget today, 16 February 2009.
The Petroleum Minister, Murli Deora, hinted some days back that the government may consider granting seven-year tax holiday for natural gas producers in an attempt to make the next round of Nelp (New Exploration and Licensing Policy) bidding attractive. The finance ministry had withdrawn the tax holiday last year.
Murli Deora was quoted by media as saying that petroleum ministry had written a letter to the finance ministry in this regard. This incentive is important for attracting investments in the Indian upstream sector.
Meanwhile, RIL will soon initiate discussions with buyers for its Krishna Godavari Basin field (D6 block) gas, reports suggest. Subsequent to the interim order of the Mumbai High Court that allowed RIL to sell gas at $4.20/million British thermal units, the company plans to start signing term sheets with the customers in the next few weeks. RIL is looking at starting trial gas production by the end of this month.
Reliance Industries' net profit fell 56.7% to Rs 3501 crore on a 8.8% decline in sales to Rs 31563 crore in Q3 December 2008 over Q3 December 2007.
RIL manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn and polyester staple fiber. The company also owns a petroleum refinery cum petrochemicals complex in Jamnagar, Gujarat that produces a wide range of products such as gasoline, superior kerosene oil and liquefied petroleum gas.