CLSA sees a 35% upside in Reliance Industries shares; here’s why

Shares of Reliance Industries were in focus today after international brokerage CLSA said it saw a 35% upside in the stock post eight straight sessions of losses sending the stock to a fresh 52-week low. CLSA said RIL is a bargain buy now. The stock is just 5% above a conservative value based on nearly three-yr-old deal value for Jio & Retail, a 15% discount to the announced Aramco deal value for O2C & nil value for new energy.

It sees a 35% upside to the stock and has given a target price of Rs 2,970. Recent brand launches such as Campa Cola, Independence in Gujarat suggest visible strides in RIL’s FMCG foray in 2023, said international brokerage CLSA. The 20% correction in shares of Reliance Industries (RIL) in less than four months has brought the valuation of the conglomerate closer to its conservative estimates, making it a bargain buy at current levels for brokerage CLSA.

But with three years having passed since the stake sale to private equity investors, CLSA sees a good chance for the IPO of Jio and/or retail in the next 12 months. In the current trading session, RIL shares were trading in the green. The stock gained 2.9% intraday to Rs 2265.45 against the previous close of Rs 2201.60 on BSE.

The stock of Reliance Industries has slipped 8.52% this year and lost 11.43% in the last one year. Total 2.03 lakh shares of the firm changed hands amounting to a turnover of Rs 46.10 crore on BSE today. Market cap of the conglomerate stood at Rs 15.23 lakh crore in early trade today.

In terms of technicals, the relative strength index (RSI) of RIL stock stands at 29.7, signaling it’s trading in the oversold zone. The stock has a beta of 1.1, indicating high volatility in a year. RIL shares are trading higher than the 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.

The stock is trading at just 5% above its conservative valuation based on a nearly 3-year-old deal value for Reliance Jio and Reliance Retail, a 15% discount to the announced Aramco deal value for its O2C business, and nil value for the new energy business, CLSA said in its report. Also read: Reliance Industries shares: Three factors that can lead recovery from 52-week low Also read: SBI, IndusInd Bank, ICICI Bank Jefferies top stock picks in banking sector.

Here’s why

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