Reliance Industries share price climbed almost 2 percent in early trade on December 5 after Goldman Sachs raised the target price of the stock to Rs 1,850.
The global financial firm reiterated a buy rating on the stock, raising the target price to Rs 1,850 from Rs 1,635.
Goldman Sachs also raised an earnings estimate of the company for FY21 and FY22 and said that the growth and free cash flow are accelerating.
Foreign brokerage firm CLSA too has a buy recommendation on the stock and raised the target price to Rs 2,010 from Rs 1,710.
CLSA said Jio announced up to 35 percent hike in tariff which still remains at a discount despite a big hike.
“Despite this hike, Jio is at a 7-20 percent discount to its competition. Tariff hike will boost its EBITDA by $1.1-1.3 billion. We see a good chance of further upside to Jio’s profit,” said CLSA.
CLSA has raised earnings per share (EPS) estimate by 1-8 percent even as tariff hike on the JioPhone is still awaited.
CLSA expects Jio’s average revenue per user (ARPU) to be higher as customers may prefer 28-day over 84-day plans.
As of December 4 close, shares of Reliance Industries have gained 38.49 percent on BSE in Calendar 2019 against a 13.26 percent gain in the equity benchmark Sensex.
Strong profit on the international maritime organisation (IMO), tariff hikes and Aramco deals are the important triggers of growth for Reliance Industries, brokerages said.
Around 1010 hours, shares of Reliance Industries traded 0.62 percent up at Rs 1562.20 on BSE.
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News Source: Moneycontrol