It is surprising that this downgrade has come at a time when Reliance is in full throttle mode.
A downgrade of Reliance Industries Ltd., India's biggest stock by market value, by Nomura Holdings Inc.
Apart from the timing, with commodities hitting new records and Reliance's earnings due on Friday, Sharma's move to slash billionaire Mukesh Ambani's oil-to-tech conglomerate to neutral from buy may carry more weight with investors due to the analyst's background. It's also the broker's first downgrade on the stock in many years, according to data compiled by Bloomberg.
While the outlook for Reliance's key businesses has continued to improve, the company's valuations look expensive after a recent surge in its shares, Sharma and his associate Aditya Bansal wrote in a note dated Oct. 18. Shares have risen more than 30% from the end of July, compared with an 18% advance in the benchmark S&P BSE Sensex Index.
The stock is trading at about 27 times of its 12-month forward earnings estimate, more than two standard deviations above its 10-year average, according to data compiled by Bloomberg.
However, we donot subscribe to the opinion of Nomura as it can be done with ulterior motives to grab Reliance shares at lower prices or someone is short sold Reliance and they are in hand and league to bail him out.
You can make use of our Bank Nifty tips for tomorrow as we have been adjudged as #1 Bank Nifty Tips provider in India.
You
should Trade Less But Trade Accurately & this is Achieved with our Tip.
