Dalal Street Investments

Avoid Reliance Petroleum.

July 14, 2006

I contradict the views expressed by Mr S P Tulsian statign that Reliance Petroleum is a good buy. Please note that Mr Tulsian holds Reliance Petroleum and has probably bought them at levels of Rs85 and thus recommending it to small investors. Please don’t fall prey and avoid this.

Some facts about Reliance Petroleum

1.Reliance’s Petroleum unit is in deep shit. They are unable to supply oil at the same cost as PSUs do. Their Petrol Pump franchisees are complaining and thus reliancei s paying out of pocket to maintain the goodwill.
2.Reliance Petroleum doesn’t even have a refinery so where is the question of stock outperformign or moving up ?
3.Reliance Petroleum will be subsequently merged into RIL(Just liek old man Dhirubhai did in 1990. Their was Reliance Petroleum too, which got merged into RIlL. Those Reliance Petro shareholders got lesser returns compared to benchmark SENSEX).

So kindly avoid this scrip. If Mr Tulsian was wise, he would have justified the earnings potential of Reliance Petroleumbut he hasn’t so it means he has vested interests.


Got something to say?