These are the main reasons for the rise in the shares of Reliance Industries
Reliance Industries: The O2C division is still under pressure from decreased petchem margins, even if the company’s net profit exceeded forecasts. The consumer business was weak despite the Oil & Gas industry’s strong performance, even if EBITDA (earnings before interest, taxes, depreciation, and amortization) increased over the previous year.
However, Jio’s success and the rate increases that fueled its average revenue per user (ARPU) growth were the quarter’s highlights.
Additionally, Reliance Industries said that by the end of this year, the first of its New Energy Giga-factories is expected to start producing solar PV modules.
With a price objective of ₹3,300, brokerage company CLSA maintained its “outperform” rating on Reliance Industries. The firm said in its report that the stock has almost reached its conservative estimates after a 15% decline in price.
Over the next 12 to 15 months, Jio’s possible IPO, the beginning of new energy projects, and a further increase in Airfiber customers might be the main catalysts for the stock.
With a price objective of ₹3,250, UBS also maintained its “buy” rating on Reliance Industries. It has, however, reduced Reliance Industries’ projected EBITDA for the 2025–2027 fiscal year between 5% and 10%.
In its note, UBS said that decreased capex might potentially lead to Reliance’s future deleveraging. The company’s future growth drivers, which include 5G adoption and home connections for digital, coupled with developing prospects for the new energy industry, remain intact.
Reliance Industries’ telecom sector should continue to develop, according to JPMorgan’s analysis, and there should be a reversal in the company’s severe weakness in petchem, retail, and refining.
JPMorgan believes that RIL’s values are favorable, despite the reductions to its EPS expectations. As a consequence, the brokerage is “overweight” on the Nifty heavyweight, with a price objective of ₹3,125.
Even though Reliance’s results were below expectations, according to the brokerage, Bernstein believes the company’s values are still strong. With a ₹3,440 price target, it continues to rate the company as “outperform”.
Nomura has reduced RIL’s projected EBITDA for the fiscal year 2025–2027 by 5%–6%, but the company maintains that the longer-term view, supported by companies that interact with customers, is still positive.
Important catalysts for the company will include the impending Jio rate rise, Jio Value Unlocking, steady retail growth, and the start of new energy activities by March 2025, according to the brokerage.
Nomura has given Reliance a “buy” rating with a ₹3,450 price target.
Additionally, Jefferies has reduced RIL’s projected EBITDA for the fiscal years 2025 and 2026 by 8% and 6%, respectively. However, it notes that a recent dramatic 14% correction has improved values.
Reliance Industries is rated a “buy” by the firm, with a ₹3,400 price objective.
Thirty-seven of the analysts covering Reliance Industries have a “sell” rating, while the remaining twenty-eight have a “buy” recommendation.
Reliance Industries’ shares closed Monday at ₹2,745 with little changes. Since hitting its most recent high of ₹3,217, the stock has dropped 15%.
