Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

CLSA: RIL May Turn Out To Be The Stock Of 2008

43 sec read

Reliance-Only Vimal
-The momentum in some pockets of the Indian equity market highlights the unabated investor appetite for broad-brush macro investment stories, the global economic outlook and execution risk notwithstanding.

-E&P (Exploration and Production), organised retail and infrastructure are equally compelling themes; Reliance is strongly positioned in each of these segments.

-Upstream E&P (under-explored) , organised retail (under-penetrated) and infrastructure (non-existent) are equally compelling themes.

-Besides having global scale in refining and petchem, Reliance is uniquely placed in each of these areas with a commanding E&P footprint, the largest ever retail rollout attempt as well as an ambitious SEZ development plan.

– At 15.6x FY10 PE, Reliance trades at a 50-70% premium to peers and we see no fundamental upside but its 12-18% neutral index weight makes it difficult to ignore.

-More Important than the performance of existing divisions would be the listing of Reliance holdings in RIL-Retail, Reliance Lifestyle, Reliance Jewels and Reliance SEZ.

-Hedging Portfolios by shorting the Nifty may not work in an environment where-in a large cap stock like RIL is rising, however going long on RIL futures may be an alternate to Portfolio Outperformance.

 

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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