Reliance Industries share price can witness a sharp upside of 25% led by recovery in petchem business amid a sustainable competitive advantage on scale economics, cost leadership, financial strength, global brokerages said.
Reliance Industries share price can witness a sharp upside of 25% led by recovery in petchem business amid a sustainable competitive advantage on scale economics, cost leadership, financial strength, global brokerages said.
Shares of billionaire Mukesh Ambani led energy-to-digital conglomerate have remained largely flat in the last one year, underperforming the benchmark Nifty that rallied over 12% during the period. However, brokerages expect this underperformance to narrow and see a sharp upside to the stock.
Shares of billionaire Mukesh Ambani led energy-to-digital conglomerate have remained largely flat in the last one year, underperforming the benchmark Nifty that rallied over 12% during the period. However, brokerages expect this underperformance to narrow and see a sharp upside to the stock.
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“Recent weakness in refining margins on indifferent global dd and sharply higher Russian exports should reverse on improving Chinese dd, better EU enforcement of Russian product import ban and a normal US driving season,” global brokerage Jefferies said in a note.
The brokerage sees limited risk to its 9% EBITDA growth estimate in RIL’s O2C segment in FY24E and finds valuation favorable. It has a Buy rating on Reliance Industries with a price target of ₹3,125, suggesting an upside of 25% from Wednesday’s closing price. The SOTP valuation implies 8x EV/EBITDA for O2C Business, 10x for India mobile and 30x for core offline retail.
Meanwhile, JP Morgan remains Overweight on the stock and continues to see the stock price offering attractive risk-reward as full benefits of the $45 billion of investments/capex across businesses over FY22-24 start flowing through FY25.
It believes listing of Jio Financial Services and more updates on the retail business in this year’s annual general meeting can help narrow RIL’s relative underperformance to Nifty.
“This year we have proposed to demerge our financial services arm and list the new entity – Jio Financial Services Ltd. This gives shareholders an opportunity to participate in an exciting new growth platform from inception,” Reliance Industries Chairman Mukesh Ambani said in its financial results for the fourth quarter ended March 2023.
In the quarter ended March 2023, Reliance Industries outperformed street expectations by registering double-digit profitability growth. Its consolidated net profit in Q4FY23 rose 19.11% to ₹19,299 crore from ₹16,203 crore in Q4FY22. Its revenue from operations increased 2.8% to ₹2.13 lakh crore from ₹2.07 lakh crore in the year-ago period.
At 12:45pm, shares of Reliance Industries were trading 0.15% lower at ₹2,492.50 apiece on the BSE.
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