 "Thumbs up for RIL: Jefferies, Bernstein's bullish bet lifts stock over 2%")
RIL share price: Mukesh Ambani-led Reliance Industries shares were buzzing in trade on Wednesday, January 8, 2025, as the scrip rose up to 2.40 per cent to an intraday high of Rs 1,270.70 per share on BSE in an otherwise weak market.
Notably, the RIL stock was the top gainer on both NSE and BSE at the time of publishing the report.
The rise in RIL share price came after global brokerages as well as domestic brokerages remained upbeat about the prospects and growth of the oil-to-telecom conglomerate.
According to reports, the New York-based brokerage Jefferies has retained a ‘Buy’ rating on RIL, setting a target price of Rs 1,690. The target reflects an upside of 36.19 per cent from the previous close of Rs 1,240.90 on January 7.
Jefferies noted that Reliance underperformed the Nifty 50 index by 15 per cent in 2024 due to concerns over medium-term growth prospects for its retail business and subdued earnings growth for the year, according to reports. 2024 marked the first time in nine years that Reliance Industries' shares delivered negative calendar year (CY) returns.
However, Jefferies expects mid-teens growth in the company’s retail segment, the potential listing of Reliance Jio, and improved profitability in the Oil-to-Chemicals (O2C) segment in FY26, the report said.
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Similarly, reports indicate that global brokerage firm Bernstein has reiterated its ‘Outperform’ rating on RIL, with a target price of Rs 1,520, representing an upside of 22.49 per cent from the previous close.
According to Bernstein, 2025 is likely to mark a recovery phase for Reliance Industries, driven by a 12 per cent increase in Jio's Average Revenue Per User (ARPU) even without tariff hikes, the retail business returning to double-digit earnings before interest, tax, depreciation and amortisation (Ebitda) growth, and an improvement in the company’s Gross Refining Margin (GRM).
Echoing the views of global brokerages, analysts at JM Financial have reiterated their 'Buy' rating on RIL, with a target price of Rs 1,660. They note that the current market price (CMP) is approaching their bear-case valuation of Rs 1,230.
The analysts expect gradual decline in net debt, as capital expenditure (capex) is expected to moderate and be fully funded internally. They forecast a 14-15 per cent compound annual growth rate (CAGR) in earnings per share (EPS) over the next 3-5 years, driven by a projected 11-12 per cent CAGR in Jio's average revenue per user (ARPU) between FY24 and FY28. Additionally, Jio's potential listing within the next 9-12 months could serve as a re-rating catalyst for the stock.
About RIL
Reliance Industries Limited (RIL) is a Fortune 500 company and the largest private-sector corporation in India. It is a global conglomerate with operations across various sectors, including energy, petrochemicals, natural gas, retail, entertainment, telecommunications, mass media, and textiles.
The RIL mcap (market capitalisation) is Rs 17,14,686.97 crore, according to BSE. The 52-week high of RIL share is Rs 1,608.95, while its 52-week low is Rs 1,202.10.
At 1:45 PM, the RIL share was trading 2.17 per cent higher at Rs 1,267.85. In comparison, BSE Sensex was trading 0.37 per cent lower at 77,907.58 levels.