Won’t be surprised to see Rs 2,250-2,300 on RIL; positive on cement, says Prakash Diwan

Market expert Prakash Diwan expects the share price of Reliance Industries to rise to Rs 2,250-2,300 while HUL to climb to Rs 2,500 and Colgate Palmolive to touch Rs 1,650-1,660 by the end of this rally.

“The market has been seeing a lot of FII money coming in, out of which, 65 percent has been ETF, so it is coming to the heavyweights. If Reliance were to carry this weight through, it will attract some money. However, eventually, when money starts moving out, it will also lose some ground. I wouldn’t be surprised if you see this all the way to about Rs 2,250-2,300 in this gush and then you will have to evaluate it depending on the liquidity flow. The stock does seem to be ripe for some sort of a rerating,” said Diwan in an interview to CNBC-TV18.

“Colgate Palmolive or Hindustan Unilever Ltd (HUL) - all of them would start taking off from where they have not participated. So I wouldn’t be surprised if, by the end of this rally, we would see HUL at Rs 2,500 and Colgate Palmolive at Rs 1,650-1,660. So those kinds of things could happen and defensives will definitely be in favour,” he said.

Diwan is positive on the cement sector. “Cement as a whole is seeing pricing power and retention of margins, which is good news. I am positive on this sector and we have been talking about this for quite some time,” he said.

According to him, the government is going to look at pockets of influence where it can make a difference in the employment scenario for the economy. “Real estate and construction happened to be the one. To play that growth, cement is a great proxy and cyclicals always do well when the tide is turning. So I think it is a cycle that has just started. UltraTech definitely has momentum backing it, it is the leader, it has capacities that could give it pricing power also and we have seen that happen,” Diwan mentioned.