Weak refining/chemicals business, a plethora of negative news flow on upstream and investments in non-related businesses like telecom resulted in Reliance Industries (RIL) underperforming over the past three years. However, we believe the current price more-or-less prices in all negatives. Ergo, going forward, we expect cyclical improvement in chemicals/refining and earnings growth from shale – all unregulated businesses – to drive stock valuations. At CMP of INR719, risk-reward clearly is in favour (2% downside, 26% upside). Maintain ‘BUY’ with target price of INR906/share.
