Goldman upgrades Reliance shares to buy

Goldman Sachs has upgraded India’s Reliance Industries (RIL) to buy from neutral,citing a potential lift in margins on increased refining and recovering oil demand,sending the refiner’s shares up in pre-open trade on Tuesday.

We believe that an upcycle in refining will lift margins and is likely to drive an earnings surprise for RIL over the medium term,by offsetting lackluster E&P performance,the bank said in a report dated on Monday.

Goldman raised its target prices for the oil and gas major to 970 rupees ($19.77) from 960 rupees previously.

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Reliance,controlled by Mukesh Ambani,India’s richest man, opened a share buyback on Feb. 1 as it looks to prop up its underperforming shares by spending up to $2.1 billion to buy back shares at a maximum price of 870 rupees each.

Reliance shares were up 1.1 percent at 842 rupees in pre-open trade on Tuesday.