Mukesh Amabani led Reliance Industries is up smartly in trade today on the back of strong positive ratings from key interational brokerages. JPMorgan has an ‘Overweight’ rating while Bernstein has an ‘Outperform’ and Jefferies a ‘Buy’. Most of these brokerages are expecting significant uptick in the share price on the back of strong visibility in retail and telecom business. Most see room for double digit growth in the share price of Reliance Industries over the next 12 months.
Here is a look at some of the key brokerage views on the RIL share price-
JPMorgan on Reliance Industries: Retail, telecom the big growth driver
JPMorgan has an ‘Overweight’ rating on the share price with the price target revised higher to Rs 1.568 per share compared to Rs 1,530 earlier. The current target price indicates an upside of nearly 9% from current levels. The international brokerage house is confident that the “next two years should be better than the last two. This is because they believe that pressure on margins due to weaker commodity prices could be a matter of past. Additionally. Consumer business growth is expected to “translate better to bottom-line, helping relative performance.”
JPMorgan highlighted that base effect are “favourable for retail and telecom and this should drive near-term earnings.” What’s interesting is that even though retail is a relatively smaller part of earnings currently, it trades at a relatively higher higher implied valuation. Account for 46% of JPMorgan’s revised price target for RIL. As a result, any “improvement in growth outlook could drive multiples up and would have a bigger stock impact than commodity upside.”
Reliance retail and telecom now account for 54% of the consolidated FY25 EBITDA. As per JPMorgan, “these will account for almost all of the net EBITDA growth over the next three years.” They expect Reliance Industries to “deliver free cash flow despite capex plans for New Energy complex, retail and poetchem.”
Bernstein on Reliance Industries: Strengthening growth momentum
Bernstein has an ‘Outperform’ rating on Reliance Industries with a target of Rs 1,640 per share. This implies over 13% upside for the share price going forward. The brokerage expects “growth momentum strengthening on the back of store rationalisation nearing completion.”
Continued tariff repair and scale-up in the new energy segment are also expected to support the uptick expected in the share price. Net debt staying flat and capex moderating are the other key reasons why Bernstein is upbeat on the Reliance Industries share price prospects.
Bernstein calculation indicates that RIL is currently trading at 10.1x one-year forward EV/EBITDA and is now at a 15% discount to 3-year average EV/EBITDA. They believe that “improving growth outlook and valuations at a 3-year low makes the risk reward attractive.”
Jefferies on Reliance Industries: Visibility on FY26 growth improving
Jefferies too has a strong ‘Buy’ rating on Reliance Industries with a target price of Rs 1,650 per share. This again implies close to 14% upside from current levels. Just like the other key brokerages, even Jefferies is betting on the recovery in retail growth visibility. A constructive tariff outlook for Jio and a strong showing in O2C also added momentum to the positive outlook.
They believe that the “sustainable competitive advantage of scale economics, cost leadership, and financial strength” will propel the share price forward. According to them, the “Rs 6 trillion free cash flow in the consumer business has created Rs 18 trillion in equity value.” They expect new growth engines with large addressable markets including digital in Jio, e-comm in Reliance Retail and new Energy segment to help share price upmove.