NEW DELHI, SEP 28: US investment bank Morgan Stanley Dean Witter (MSDW) on Tuesday reinforced the bullish stance on Reliance Industries based on its attractive valuations and focus on creating shareholders wealth among other things. The investment bank has raised the target on the Reliance share price to Rs 293 in 12 months.Morgan Stanley said it expects Reliance's net profit to rise by 20 per cent to Rs 2208.3 crore and by another 33 per cent to Rs 2938 crore in the fiscal 2001. "RIL's valuations are attractive," Morgan Stanley said in its research report on the company.It said the return on RIL's petrochemical assets is likely to remain above the company's cost of capital despite the cyclical downturn. The next two years would seen Reliance driven mainly by growth in sales volumes and during the current year, the company will add almost 50 per cent to its production capabilities, including a 1.4 million ton paraxylene plant and 0.6 million tonne polypropylene plant.Parts of these capacity additionshave already commenced commercial production, it said. RIL's volume growth story is gaining further momentum through acquisitions, thus creating room for earnings upside. RIL has completed its fourth acquisition in the polyester business by buying out the polyester filament yarn and polyester chips capacity of Raymond Synthetics.Morgan also found the latest reports about the creeping acquisition of two per cent of RIL's equity by the Ambani family a positive development. The family holding stands raised from 26 per cent to 28 per cent. It noted company managing director Anil Ambani statement on the creeping acquisition which read as ``we have increased our shareholding in RIL. It is our intention to further enhance our shareholding on a continuous basis in the future utilizing this route to the fullest. This reflects our confidence in the future prospects of RIL and demonstrates our strongest commitment to enhancing overall shareholder value''.Morgan Stanley also hinted at a possibility of an AmericanDepository Receipts (ADR) listing for Reliance Industries.RIL GDRs spurt 10 pcMUMBAI: After the Morgan Stanley report hit the overseas markets, the Reliance GDR rallied by 10.24 per cent to hit $12.82 during mid-session. This translates into Rs 279 per share, a premium of 22.6 per cent to the domestic price of Rs 227. The GDR price is already close to the target of Rs 293 set by Morgan Stanley.
