Reliance Industries Ltd. (RIL), India’s biggest company by market value, was cut to “neutral” from “buy” by Goldman Sachs Group Inc., which said prospects for any “medium-term earnings surprise” may be limited.
The brokerage lowered its share-price estimate to Rs 1,125 from Rs 1,250 and removed Reliance from its Asia “conviction buy” list following the company’s fourth-quarter results, analysts led by Nilesh Banerjee wrote in a report.
Reliance, controlled by billionaire Mukesh Ambani, posted a 14 per cent increase in net income in the three months ended March 31 to Rs 53.8 billion ($1.2 billion), the slowest growth in six quarters. Profit missed the Rs 54.3 billion average estimate of 18 analysts in a Bloomberg survey as output of natural gas fell from the KG-D6 block, the country’s largest.
“We remain concerned about its E&P division owing to a lack of clarity on D-6 production levels and slow progress in exploration acreage,” the analysts said.
Reliance has declined 3.8 per cent for two consecutive days since April 21, when the earnings were announced.
Of 46 analysts tracking Reliance, 35 recommend buying the stock and two advocate selling, according to data compiled by Bloomberg.
