'RIL shares to outperform in a month due to short-term valuation'

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Shares of Reliance Industries will rise relative to India’s benchmark index in next 30 days, said Morgan Stanley citing compelling short-term valuations.

“At current levels, price-to-earnings is 12 times on trailing earnings and price-to-book is 1.4 (times), discounts of 30 (percent) and 35 (percent) to its historical averages. Even on relative price-to-earnings, the stock is trading at a 20 (percent) discount to the Sensex, so valuation looks attractive,” said the bank in a note.

Morgan Stanley also underpins the fact that the company’s earnings are positively correlated with depreciation of the Indian rupee, which should mitigate recent concerns on refining and petrochemical margins.

Reuters