Shares of Anil Ambani group firm Reliance Capital today rose by over 6 per cent after at least four brokerage firms termed the stock as undervalued following the recent plunge.

The scrip was trading 6.1 per cent up at Rs 468.30 in the afternoon trade on the National Stock Exchange. On the Bombay Stock Exchange also, it was trading 6.6 per cent higher at Rs 470.25.

Today’s rally followed a positive stance taken by a number of brokerage firms on the stock after the company announced its quarterly results over the week-end.

In a report published today, Kotak Institutional Equities said that Reliance Capital continued to build its core businesses during the third quarter, with cost controls and fee income adding to its earnings.

“The stock has corrected significantly, likely due to challenges in the operating environment across its businesses and general concerns in ADA Group,” the brokerage firm said, while finding the stock attractively valued at the current level.

It, however, said that investor’s confidence on the ADA Group would be crucial in driving the stock performance.

In a separate report, Edelweiss said that earnings growth was robust for the companies’ core businesses such as asset management and consumer financing.

It further said that the stock has under-performed the sector considerably over the past one year due to regulatory concerns in life insurance and mutual fund businesses and business restructuring.

“However, we believe the concerns are largely priced in the current valuations and at this stage, the risk-reward ratio seems to be more favourable,” it added.

Morgan Stanley also said that the company has seen improving profit trend in its core businesses as it recorded robust growth in asset management, consumer financing and broking and distribution businesses.

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