Reliance Industries has kickstarted Diwali Day trade with a bang. The share price of RIL surged 3% after the strong Q2 numbers. Most brokerages have reiterated Buy rating on the stock and see the company’s initiatives in terms of ramping up the New Energy (NE) ecosystem with cell facility starting next month as a key growth driver. The PS-to-module value chain, 40GWh BESS, 3GW electrolyser are expected to contribute to the bottomline from FY28
The 10GW module/cell may add 6% to FY27 consolidated profit, as per Nuvama. Additionally, brokerages also highlighted that the RTC power plant (starting H1FY27) in Kutch for 3MTPA GH2 production (3% of global H2 demand) is another key driver going forward. They anticipate that its captive power cost may fall 25%, potentially adding another 6% to PAT. That apart, the AI data centre investments, as well as the FMCG business focus on brand building/food parks, are set to drive growth.
Jefferies on Reliance Industries: Revises price target higher
Jefferies hasn’t just reiterated Buy but also revised the target price higher. The current target at Rs 1,785 implies nearly 30% upside from current levels. According to the international brokerage house, sustainable competitive advantage on scale economics, cost leadership, and financial strength are going to support share price.
“RIL’s battery foray is part of its Net Carbon Zero 2035 target. BESS addresses challenges of low capture rates, curtailment, and non-solar peak load as RE share of generation rises,” they added.
They added that “recent solar + BESS discovered tariffs of Rs 3-3.5/KWh imply BESS cost Rs 4.5-5/KWh, comparing favorably with marginal thermal tariffs of Rs 5.4-5.8/KWh currently” This implies that “ BESS demand in India is taking off, with 32GWh under construction. We forecast 62GW/268GWh of energy storage demand in 2030, with 214GWh fulfilled by BESS (balance by Pumped Hydro Storage),” they added.
Assuming RIL shifts its entire captive power consumption to renewable energy by FY28, Jefferies expects “Rs 4,700 crore of annual savings and valuing this at 10x EV/EBITDA, we arrive at Rs 47,000 crore i.e., Rs 35/sh.”
Nuvama on Reliance Industries: Buy
Key brokerage house, Nuvama Institutional Equities has a Buy rating with a target price of Rs1,769. This implies a whopping 21% upside from current levels.
Nuvama outlined that the new energy rollout is in progress and they see it as a key positive with the cell starting next month; four active module lines with ramp up to 10GW ongoing (aim 20GW). At 10GW module/cell capacity, they estimate that RIL could add 6% to FY27 PAT. With the PS, ingot/wafer, 3GW electrolyser, they see the company on track to address 50% of global capacity.
Additionally, Nuvama highlighted that setting up RTC power plant in Kutch for internal use for GH2 production, green chemicals will help unlock multi-decadal opportunities. They believe, “captive power cost will fall 25%, possibly adding 6% to PAT. Reliance Intelligence (RI) to lead data centre/AI investments; JV with Meta on Llama models.” According to the brokerage house, the India monetisation is still in early stages.
On to the other verticals, Nuvama sees RCPL focus on brand building/food parks as another key growth driver. Moreover, JioMart pivoting to 30-minute delivery and expanding its dark store network is expected to add to the bottomline. They added that, “Jio growth initiatives: bundled services, device-led penetration, targeted campaigns. E&P: aims to add wells in FY26 to hike production.”
