The Reliance Industries stock rose to its all-time high today amid a report the conglomerate is likely to benefit in its effort to acquire debt-laden Alok Industries after the amendment of the bankruptcy law and a court ruling that lenders should go in for fresh round of voting. Alok Industries owes more than Rs 29,500 crore to lenders. In the first round of bidding, Reliance Industries- JM Financial Asset Reconstruction Company offered Rs 4950 crore for the Alok Industries to lenders which was rejected.
The second bid was worth Rs 5,050 crore which too was rejected by lenders such as IDBI Bank, Bank of India, Central Bank of India and Dena Bank.
At 1:43 pm, the stock was trading 0.40% higher at 1,011 level. The stock which opened at 1007.50 level on the BSE rose to its all-time high of 1023.50 on BSE. The stock has been gaining for the last four days and has risen 3.72% during the period. The stock is up nearly 11% since the beginning of this year and has risen 47.11% during the last one year.
The latest bout of rally in the stock started after May 30, 2018 when the stock closed at 916 level. During the last 11 trading sessions, the stock has gained 107 points considering its all-time high level of 1,023 reached in trade today.
Equirus Securities gave a target price of Rs 1045 on April 29, 2018 post its Q4 earnings which does not seem out of sight now.
The brokerage said, “We expect the full benefit of vertically-integrated petrochemical expansion and an improvement in Reliance Jio’s operating metrics to drive a 13% operating profit CAGR over FY18-FY20E. RIL’s stock has been outperforming the benchmark and building in strong growth for Reliance Jio.”
RIL reported 18% Y-o-Y growth in standalone revenue in Q4 FY18 primarily due to robust performance of its petrochemicals division (46% YoY). Standalone EBITDA margin expanded by 19 bps to in Q4FY18 driven by strong petrochemicals margins led by higher volumes. Reliance Industries reported a 17.3 per cent jump in its fourth quarter net profit on the back of robust petrochemical margins and upstart telecom arm Jios maiden profits.
Its net profit of Rs 9,435 crore, or Rs 15.9 per share, in January-March was 17.3 per cent higher than Rs 8,046 crore, or Rs 13.6 a share, posted in the same period a year ago.
On a sequential basis, the company’s net profit rise was only 0.1 per cent, RIL said in a statement.
The company, however, reported a record net profit of Rs 36,075 crore for the 2017-18 fiscal, up 20.6 per cent.