RIL: 945-925 May Be A Good Demand Zone; Apparent Withdrawal Of Arbitration Against Govt May Help Along With Operating Leverages & Expected 4G Roll Outs

Trading Idea: RIL

CMP: 960

Either buy above 970-995 or in dips around 945-925 OR 885-865;

TGT: 1015*-1070-1095*-1150 & 1165-1215-1250*-1290-1340-1410 (1-3M & 6-12M)

TSL< 905 OR < 845

Note: Consecutive closing (3 days) below 845, RIL may further fall towards 815*-795-770 and 715-600 in the near to long term (alternative bear/worst case scenario).

For RIL (Standalone):

Q4FY16 TTM EPS: 84.70 (FY:16/Actual)

Projected FWD EPS: 97-111.15-127.25 (FY:17-19/Estimated)

Average PE: 12 (Keeping in mind likely cash burn out for R-Jio for the first few years after commercial launch).

Median fair value: 1015-1165-1335-1530 (FY:16/TTM & FY:17-19/FWD; if EPS delivered as par estimates).

As par BG metrics & current market volatility:

Current median valuation may be around: 995 (FY:16/TTM)

Projected fair valuation might be around: 1065-1135-1215 (FY:17-19/FWD)

 

RELIANCE	EPS	BV	P/E	Low	High	Median	200-DEMA	10-DEMA
Q4FY16/TTM	84.7	667.09	12	995.15	987.15	991.15	974.34	958.74
FY17/FWD	97	730.55	12	1064.96	1056.40	1060.68	974.34	958.74
FY18/FWD	111.15	800.5	12	1139.99	1130.83	1135.41	974.34	958.74
FY19/FWD	127.25	876.25	12	1219.76	1209.96	1214.86	974.34	958.74

Analytical Charts: