Reliance Industries has come down to 980 level. How long should I wait before I pounce on it to see a wonderful retirement :-). Well RIL is not a good dividend paying company as far as my dividend calculations go, so such expectations are unfounded. And due to some whim of mind, I already have RIL at very high price, it will take ages for it to break even (since I am sure of good returns, I am holding on to it).
But lets deliberate on RIL a bit. It has been dropping since 1080 levels and has done absolutely nothing for an year. The probable reason that market is currently punishing RIL--in spite of good results--is that they have created a lot many liabilities and they still need a lot of capital to fund their future acquisitions. Their current spate of buyouts in the US Shale gas field is a risky business anyway. Well to fund their needs, RIL is selling its treasury stocks to LIC @ 950. This is what the investors are more angry at. No one likes thy neighbor getting richer without sharing the profit. I am sure RIL stock will tumble to 960 levels before coming into senses. Even at those levels (15-16 PE), a big company like RIL will be a good buy opportunity for long term.
Let's look at the brighter side of RIL. What is the internet penetration in India? Close to 7%-8%, so if we believe the India will shine someday story--I do believe, not because I am a patriot but because it is my gut feeling--at least internet will be ubiquitous. Who has 4G licenses? Bharti & RIL (I own both). RIL is sitting on the largest gas reserves and RIL has biggest reach in the policy making. They are just waiting for a trigger to start their dysfunctional petrol pumps.
So I am accumulating, are you?
But lets deliberate on RIL a bit. It has been dropping since 1080 levels and has done absolutely nothing for an year. The probable reason that market is currently punishing RIL--in spite of good results--is that they have created a lot many liabilities and they still need a lot of capital to fund their future acquisitions. Their current spate of buyouts in the US Shale gas field is a risky business anyway. Well to fund their needs, RIL is selling its treasury stocks to LIC @ 950. This is what the investors are more angry at. No one likes thy neighbor getting richer without sharing the profit. I am sure RIL stock will tumble to 960 levels before coming into senses. Even at those levels (15-16 PE), a big company like RIL will be a good buy opportunity for long term.
Let's look at the brighter side of RIL. What is the internet penetration in India? Close to 7%-8%, so if we believe the India will shine someday story--I do believe, not because I am a patriot but because it is my gut feeling--at least internet will be ubiquitous. Who has 4G licenses? Bharti & RIL (I own both). RIL is sitting on the largest gas reserves and RIL has biggest reach in the policy making. They are just waiting for a trigger to start their dysfunctional petrol pumps.
So I am accumulating, are you?
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