Morgan Stanley sees Reliance ADR listing

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 additions have 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.