FMP

FMP

Enter

Reliance Industries (NSE) Limited (RIL) has been experiencing a period of stagnation in its share performance, despite strong rallies in various sectors earlier

Seizing the Opportunity: Goldman Sachs Bullish on Reliance Industries Amidst Recent Market Stagnation

-

twitterlinkedinfacebook
blog post cover photo

Image credit: Dylan Calluy

Reliance Industries (NSE) Limited (RIL) has been experiencing a period of stagnation in its share performance, despite strong rallies in various sectors earlier this year. Goldman Sachs (NYSE) analysis reveals that RIL's current discount to its net asset value (NAV) is at its widest since January 2021, largely attributed to factors such as declining Singapore refining margins and a slight earnings miss in the fourth quarter.

However, Goldman Sachs remains optimistic about the future prospects of RIL and sees several positive catalysts that could propel its shares higher in the near term.

Key Insights from Goldman Sachs' Analysis:

  1. Oil-to-Chemical Segment Potential: The investment bank is bullish on medium-term earnings from RIL's oil-to-chemical segment, expecting a rebound despite recent refining margin dips. Tightening global refining supply-demand dynamics and delayed peak oil demand forecasts contribute to this positive outlook.

  2. Improving Petchem Margins: Goldman Sachs anticipates improved petrochemical margins driven by higher oil prices, the conclusion of global demand destocking, and favorable feedstock costs from lower US gas prices.

  3. Consumer Return on Capital Invested (CROCI) Growth: RIL's CROCI is projected to witness substantial growth, reaching its highest level since 2011 by FY27. Factors contributing to this growth include anticipated telecom tariff hikes, increased retail same-store sales growth, and declining capital expenditure intensity in both the telecom and retail sectors.

Amidst these positive indicators, investors are presented with an opportune moment to capitalize on RIL's potential. As RIL gears up for future growth, now is the time to consider investing in the company.

Utilize our Screener (Stock) API to monitor market trends and identify potential opportunities in the energy sector. Learn more about how our API can support your investment strategy. Explore Now

Other Blogs

Nov 25, 2023 6:39 AM - Parth Sanghvi

DCF Valuation vs. Comparable Companies Analysis: Choosing the Right Valuation Method

Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...

blog post title

Dec 23, 2023 2:19 AM - Parth Sanghvi

Understanding the Limitations of DCF Analysis: A Guide to Overcoming Challenges

Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...

blog post title

Dec 25, 2023 2:28 AM - Parth Sanghvi

Integrating Sustainability into Valuations: Navigating ESG Factors within the Discounted Cash Flow (DCF) Model

Introduction: The investment landscape is undergoing a profound shift with a heightened emphasis on sustainability and responsible investing. In this blog post, we explore the intersection of Environmental, Social, and Governance (ESG) considerations within the Discounted Cash Flow (DCF) model, h...

blog post title
FMP

FMP

Financial Modeling Prep API provides real time stock price, company financial statements, major index prices, stock historical data, forex real time rate and cryptocurrencies. Financial Modeling Prep stock price API is in real time, the company reports can be found in quarter or annual format, and goes back 30 years in history.
twitterlinkedinfacebookinstagram
2017-2024 © Financial Modeling Prep