Sharekhan Investor's Eye - March 20

Reliance Industries
Cluster: Evergreen
Recommendation: Buy
Price target: Rs870
Current market price: Rs775

Price target revised to Rs870
Reliance Petroleum Ltd (RPL) has filed the red herring prospectus for its initial public offering (IPO) of 90 crore shares. The IPO proceeds are to be used to set up a greenfield refinery with a capacity of refining 580,000 barrels a day or 33 million tonne per annum of crude oil. The project is to be funded through a mix of debt and equity.

We believe that the RPL public issue will be value accretive for RIL, as it will add Rs75-110 per share to RIL (based on the issue price of Rs47.5-60 per share). Based on that we are raising our price target to Rs870 per share.



Balmer Lawrie & Company
Cluster: Cannonball
Recommendation: Book Profit
Current market price: Rs641

Book profit
We had initiated coverage on Balmer Lawrie & Company on August 11, 2005 at Rs400. The stock has appreciated by 60.3% since then and achieved our price target of Rs600. We recommend investors to book profit.