Sharekhan recommends to hold RIL stock
By siliconindia   |   Wednesday, 17 June 2009, 02:07 IST   |    17 Comments
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Sharekhan recommends to hold RIL stock
Bangalore: Though the decision by Bombay High Court on selling gas to Reliance Natural Resources (RNRL) at a reduced price caused the share price of Reliance Industries (RIL) to fall, Sharekhan, a brokerage firm has maintained the hold rating on RIL. Following the court verdict, on Monday, the RIL prices dropped by 7.48 percent this was followed by today's drop of nearly two percent. The court had given its verdict in favor of RNRL by stating that RNRL will get assured gas supply of 28 million cubic meters a day (mmscmd) from RIL's Krishna-Godavari (KG) basin at the price of $2.34 per million metric British thermal unit (mmbtu) for 17 years. The verdict also strengthens National Thermal Power Corporation (NTPC)'s position against RIL in its ongoing court case for the supply of 12mmscmd of gas. Though the court verdict is negative for RIL, Sharekhan is maintaining optimism because RIL has an option to approach the Supreme Court. Sharekhan also expects the FY2011 earnings before interest, depreciation, tax and amortization (EBITDA) to get reduced by Rs 3,683 crore and the FY2011 earnings per share (EPS) to be down by 12.0 percent. According to Sharekhan, the price target is under review for the recommendation.