Mumbai: Shares of (RIL), which hit their highest level in 11 months on Friday, could rise 13% more by year end due to strong market liquidity and on the strength of its digital, telecom and green energy offerings, analysts have said.
The oil-to-telecom conglomerate’s stock gained 4% to touch Rs 2,388.25 on Friday after chairman Mukesh Ambani said the company would double production of green hydrogen, which is cheaper than other fuels.
The company’s market capitalisation surpassed Rs 15 lakh crore for the first time ever.
Following rival telco Bharti Airtel’s announcement of average revenue per user (ARPU) at Rs 200, analysts are saying that RIL subsidiary Jio Infocomm’s ARPU could be even higher. Besides these factors, oil major Saudi Aramco is also looking to buy a stake in RIL’s petrochemicals business.
“The stock could reach as high as Rs 2,700 by the end of the year,” said Sanjiv Bhasin, director, IIFL Securities.
Since August 1, the Sensex and Nifty are up about 10%, while RIL has gained over 17%.
In the derivatives segment, RIL’s September futures gained 7.35% last week with outstanding positions increasing by 5.5% to 33.9 million shares, indicating a build-up of long positions or bullish bets.
RIL shares could head to Rs 2,500-Rs 2,550 in the near term after breaking out of its long consolidation range on monthly and weekly charts, said Rajesh Palviya, head-technicals and derivatives at Axis Securities.
He recommends a call ladder strategy in RIL options expiring September 30, which involves buying one lot of its 2,400 call option at Rs 62 and selling one lot each of 2,460 call at Rs 40 and one lot of 2,520 call at Rs 25.
“The maximum profit of Rs 15,750 will be attained between 2,460 to 2,520 levels, while the strategy will start making loss above 2,580. The cost of the strategy involves credit inflow of Rs 750 which means there will be no loss in the strategy even if Reliance trades and remains below 2,400 levels at expiry,” said Palviya.
“However, above 2,580 it is advisable to exit the strategy in total to avoid unlimited losses. Break-even points of the strategy are 2,583 on the upside and 2,397 on the lower side,” he added.