Saturday 11 October 2008

Merrill Lynch puts 'buy' on Reliance Inds

Reliance Inds
cmp: Rs 1,649.60
target price: Rs 2,910

Merrill Lynch has retained its “buy” rating on the stock, saying it expects the 2-year earnings per share (EPS) CAGR in FY08-FY10E to be 40%. “RIL has one of the strongest earnings growth in our global universe.

KG D6 oil and gas and RPL refinery will be main earnings drivers. RIL’s valuation is compelling now at 8.5 times on FY10E EPS and PEG of 0.21 times,” said Merrill Lynch in a note to its clients.

According to Merrill Lynch, positive news flow on exploration and production (E&P) in terms of discoveries and reserves accretion is likely to continue for the company. “RIL is scheduled to drill in at least three highly prospective blocks (KG D6, KG D9 and Mahanadi D4) in the next 12 months,” said the Merrill note.

Source: EconomicTimes

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