Will RIL stock hit the Rs 3,500-mark before its next AGM?

Investors remained unenthusiastic about Reliance Industries, a day after the company’s 45th Annual General Meeting. 

Though Chairman Mukesh Ambani spelt out detailed plans for telecom, retail and new energy businesses, analysts cautioned against the high capital expenditure’s risks in the near-term.

Global brokerage UBS, for instance, highlighted that “Reliance Industries’ near-term debt will rise as it gets aggressive in its investments across verticals.”

Those at HSBC, too, said, “Recent transactions to purchase technology, as well as investment plans for new energy, should kick-start another engine of growth, but will likely require investment in the interim. While e-commerce is gaining momentum, it is yet to achieve meaningful scale. Thus, the burden of revenue growth will fall on subscriber additions (in the telecom vertical) and, in the interim, the company will have to spend on 5G capex.”

All this, the brokerage said, will likely weigh on the stock performance in the near to medium term.

Nonetheless, analysts suggest investors focus on Reliance Industries’ long-term growth trajectory. 

With Akash Ambani taking over digital, Isha taking over retail, and Anant taking over new energy, analysts said investors can be assured of a clear succession plan.

Further, assigning timelines of 2024 and 2025 gives credence to the pace of work RIL has undertaken and the journey it still needs to take to bring down the cost curves of these new technologies. 

Given this, most brokerages also remain bullish on the stock from a 12-month perspective, and see up to 19% upside.

Technically, too, the stock seems to be well placed to scale fresh life-time highs.

Avdhut Bagkar of Business Standard says, RIL stock has doubled since Covid-19 lows; all-time high of Rs 2,847 in April 2022. Long-term play: Buy around Rs 2,200 - Rs 2,400 levels, charts indicate. Breakout above Rs 2,800 (resistance level) could take it to Rs 3,500 in a year.

On Wednesday, markets will remain closed on account of Ganesh Chaturthi.