New Delhi, May 9 | Global investment banking firm Morgan Stanley has said that Reliance Industries is on a path toward a $20 billion+ EBITDA run rate inflection, which could be supported by five major factors. Besides the firm’s new energy business could add $50 billion in market cap in 2022.
First and foremost, refinery margins could nearly double and be sustained at high levels for the next half decade, with global fuel markets seeing sustained lower supply due to a lack of investments.
The global firm sees telecom average revenue per user (ARPU) rising, quality of subscribers improving and churn falling and Reliance guided for normalisation ahead as one recharge cycle is behind.
Thereafter, the global gas market could tighten further as producer discipline remains with rising domestic gas production.
Rising traction on digital commerce with 193 million subscribers and consistent 20 per cent revenue contribution would expand margins.
Lastly, superior petrochemical spreads in olefin and PVC as global cost curves are uplifted, and supply should add to unwinding.
“Investors appear highly sceptical, especially on sustainability of the energy upcycle and potential demand destruction, but we see enough buffers on demand/global inventories along with supply discipline to drive multi-year outperformance,” the global investment firm said in a report.
The Indian market recovered sharply on the last trading day amid the weekend after a continuous fall. Market has managed to halt above 16000 Nifty levels after continuous losing streak. Index reacted violently, grasping Indian as well as global factors throughout the week. Simultaneously, Inflation is catching up and profit margins are taking a hit.
Sensex advanced 1532 points or 2.90 percent while Nifty gained 484 points or 3.07 percent in a week. Simultaneously, Bank nifty has overcome bear’s dominance ending the session with 3.49 percent gain. Sectorally,Nifty Metal saw the highest gains of 7.40 percent followed by the Realty and Auto added over 4% gain. On the flip side Nifty IT tumbled 2.82 percent on weekly basis. Midcap and Small Cap measures rising nearly 2 percent as well.
In Nifty stock, EICHERMOT gained 11.31% while TECHM lost 5.98% on a weekly basis. INDIA VIX closes at 23.10 suggests volatility driven market is going to remain intact. Coming to the OI Data, on the call side highest OI witnessed at 17000 Nifty followed by 16800 Nifty strike price while on the put side, the highest OI was at 16000 Nifty followed by 15800 Nifty strike price. Technically, Nifty has formed a Tweezer Bottom type pattern in the weekly chart suggesting a short term buying rally may drive the market until monthly expiry. On the daily chart, price has rebounded from the lower Bollinger band as well.
Momentum indicators MACD & Stochastic were trading with a positive crossover & reversed from oversold zone. However, Index is still struggling to get the support of 50 Simple Moving Average in daily chart. Short term investors and traders are advised to work with option strategies to neutralize the volatility. Overall, Nifty is having support at 15700 mark while on the upside 16700 followed by 16500 may act as an immediate resistance. While Bank nifty has support around 32500 while resistance is placed at 36000 on weekly chart.
Source: Choice India