Nuvama Institutional Equities maintained its ‘Buy’ rating on Reliance Industries, with a target price of Rs 1,801, which implies an upside of 20% from the current market price. This is the “highest on the street,” said Nuvama.
Nuvama on Reliance Industries: New Energy category to add 50% PAT
Nuvama said net profit from the new energy segment (module + power) is expected to rise to Rs 11,400 crore by FY30 from Rs 2,000 crore in FY27, that is a 140% CAGR.
“On our conservative assumptions, the new energy share in net profit shall thus rise to 9% by FY30. A faster ramp-up in capacity additions and utilisation can fuel more potential upside that our numbers currently indicate,” said Nuvama.
Nuvama expects additional businesses in the New Energy segment. The company shall also start to contribute in a phased manner. This shall enable Reliance Industry to meet its target of increasing PAT contribution from the New Energy segment to over 50% by 2030, as announced during the AGM in 2024.
Nuvama on Reliance Industries: DCR modules could add Rs 3800 crore to PAT
Nuvama expects Reliance Industries could conservatively add a net profit of Rs 3,800 crore on a 10GW facility, which is 6% of FY25’s consolidated PAT. This comes on the assumption of 75% capacity utilisation for its initial 10GW solar module facility and channel checks suggesting 5% introductory premium pricing for its DCR modules, said Nuvama.
Nuvama on Reliance Industries: Offering HJT modules
Nuvama did channel checks with key industry participants, which revealed that Reliance Industries has offered to sell its HJT modules in the lucrative domestic market since the rollout of its power generation business is some time away.
This is also supported by the inclusion of its solar modules in the Ministry of New and Renewable Energy’s Approved List of Models and Manufacturers (ALMM). The brokerage’s channel checks also indicate introductory realisations for HJT modules are at a 5% premium to TOPCon modules.
“Our market drill-down shows Reliance Industries has commenced selling modules externally. We forecast it shall add 6% to PAT (a la Tata Power) and shine out a huge valuation kicker (Waaree/Premier),” said Nuvama.