A ‘Blue Chip’ stock is generally referred to as a stock that is issued by well-established and financially sound companies along with a great reputation. Normally, such companies have years of operating history and consistent dividend payouts to their beneficiaries.
Listed below is one such Blue Chip stock that gets a ‘Buy’ call from JPMorgan, an international brokerage firm, having a potential upside of more than 15 percent:
Reliance Industries Limited
With a market capitalization of Rs 16.20 lakh crores, the stocks of Reliance Industries Limited started their trading session on Friday at Rs 2,381 and currently trades at Rs 2,393.50, gaining around 0.80 percent compared to the previous closing levels of Rs 2,376.40 apiece. It has a decent dividend yield of 0.40 percent.
The recent financial quarter, i.e., the June-September quarter has been a highly performing one with the operating revenues as well as net profits showing an increase in numbers.
The former witnessed a jump from Rs 2,07,559 crores during Q1FY23-24 to Rs 2,34,956 crores during Q2FY23-24, and, the latter, keeping the timeframe the same, moved up from Rs 18,182 crores to Rs 19,820 crores.
JPMorgan, one of the well-known brokerage houses across the globe, has given an ‘overweight’ rating to the Mukesh Ambani-led company with a target price of Rs 2,810 indicating a potential upside of 17.40 percent from the current stock price level.
The Brokerage mentioned the rationale for the above recommendation to be the possible shift in the free cash flows of the company on the positive side. Moreover, the analysts expect the ‘Telecom’ as well as ‘Retail’ verticals of RIL to perform better which would contribute to drive the company’s growth and revive investor sentiment.
As per the latest presentations, the company, by the end of FY24, expects to peak its capex plans in order to complete the fast-track pan-India roll-out of the 5G network in the country.
According to the latest shareholding pattern data available for the quarter ended September 2023, the company’s Promoters hold a 50.27 percent stake, and the Foreign Institutional Investors (FIIs), slightly increasing stake in the past couple of quarters, currently holds a 22.6 percent stake in the company.
Reliance Industries Limited is one of the largest conglomerate companies based in India that is engaged in a wide range of businesses, i.e., refining, petrochemicals, financial services, retail, communications, etc.
Written by Amit Madnani
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