If you want to play safe in this volatile market investor should choose to invest in Reliance Industries Ltd. This is not because its fundamental side is good but also refining margins are improving and this makes the stock a positive buy.
Our view on Reliance Industries is very positive and at the end of this financial year it can produce an earnings per share (EPS) of rupees 69 to 71. We are very much confident on the fundamental side of Reliance industries but we are not certain about the markets in which way it will be heading. As, Reliance industries is included in the index funds so in general the stock moves as per the market trend. Clarity on the BP proposal of its gas deal, CAG report and shale gas improving is some of the other positive factors which make this stock a more attractive buy.
Another important factor which makes this stock a good buy is its cash in the balance sheet. By the end of FY12 the cash balance will be around 250-300 rupees per share makes this stock to further buy rather investing on every dips. Thus, any fall in the stock prices should be a good opportunity to accumulate more stocks. Moreover, the gas production will increase the growth prospects of the company in coming 1 to 2 years time.
“Bell the bull says: In medium term also Reliance is a good buy as the exchange funds are very active and index heavy weight stocks has been hit hard”