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Reliance Industries Limited (NSEI:RELIANCE) received a lot of attention from a substantial price movement on the NSEI over the last few months, increasing to ₹996.3 at one point, and dropping to the lows of ₹882.7. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Reliance Industries’s current trading price of ₹953.95 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Reliance Industries’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Reliance Industries
Is Reliance Industries still cheap?
Great news for investors – Reliance Industries is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is ₹1232.11, but it is currently trading at ₹953.95 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Reliance Industries’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Reliance Industries look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Reliance Industries’s earnings over the next few years are expected to increase by 53.11%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since RELIANCE is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on RELIANCE for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RELIANCE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.