Shares of Adani Green’s Rival — Reliance Industries were trading at ₹ 2548.05 apiece on the National Stock Exchange (NSE) at 12:08 PM on Thursday, after a positive note from the brokerage firm Bernstein.
Bernstein highlighted that going forward, clean energy is the new pillar for growth for Reliance Industries. It believes that the new energy business could earn revenue of up to $10 billion in revenue by 2030.
The brokerage said that Reliance’s clean energy business ascribes a value of ₹ 200 per share, considering the scope of expansion. This is about 7.5 percent of the company’s current market price of around ₹ 2,600 per share. Bernstein expects the Total Addressable Market (TAM) for the clean energy vertical to reach $200 billion by 2050, with an investment of $ 2 trillion.
Bernstein identified new segments like solar, battery, electrolyzers and fuel cells. The Mukesh Ambani-led company is investing over 75,000 crores in building a comprehensive ecosystem for new energy and new materials in India. The brokerage expects that Reliance Industries can capture 60 percent of the solar, 30 percent of battery, and 20 percent of the hydrogen market going forward.
The brokerage expects operating profit or EBITDA of Reliance’s Oil-to-Chemicals (O2C) business to grow by 1 percent year-on-year to ₹ 63,000 crores as it continues to benefit from the low-cost Russian crude feedstock. Moreover, it said that funding will not be an issue for the company, considering its current balance sheet state and outlook on free cash flow.
Bernstein has maintained an outperform rating on the stock with a target price of ₹ 3040, which translates to an upside of 19.30 percent as compared to its share price of ₹ 2548.05 on Thursday.
In September last year, the Adani Group said that it would invest $ 100 billion primarily in energy transition and digital opportunities, as well as sectors such as aerospace and defence, metals and petrochemicals. It added that it has received 70% of the investment for the energy transition space. It said that it is already the world’s largest solar player and intends to do far more.
Adani New Industries is its bet in the energy transition space. The Adani Group is committed to invest $70 billion in an integrated hydrogen-based value chain, it said at The Forbes Global CEO Conference 2022 in Singapore.
Written By Simran Bafna
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