Market leading conglomerate stock of Mukesh Ambani has received ambitious target prices from international brokerages CLSA and Bernstein, fueling optimism and driving the stock’s upward trajectory.
Price Movement
In Friday’s trading session, Reliance Industries Limited share price reached an intra-day high of Rs.3,022.65 per share, representing 1 percent rise from its previous close of Rs.2,995.1 apiece. The share has given returns of more than 216 percent in a period of five years.
What are the targets
Bernstein has maintained its ‘outperform’ rating on Reliance Industries, increasing its target price to Rs.3,440 per share, suggesting a potential upside of around 15 percent. The brokerage raised its target price for the Jio business in response to the telecom operator’s introduction of its lowest-priced prepaid plan to date.
The completion of Reliance Jio’s 5G rollout is viewed as a major growth catalyst, with Bernstein forecasting substantial monetization opportunities from 5G services that will drive future revenue growth.
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The brokerage projects a 16 percent compound annual growth rate (CAGR) in revenue and a 20 percent CAGR in EBITDA for Jio over the next three years, with these growth trends anticipated to positively impact financial performance in FY2025.
CLSA has upheld its ‘outperform’ rating for Reliance Industries with a target price of Rs.3,300 per share, with an upside potential of 10 percent. The brokerage noted that Jio’s 5G rollout has resulted in a 46 percent rise in capital expenditure for FY24 compared to the previous year, affecting its free cash flow, despite a 15 percent increase in operating cash flow.
CLSA expects Jio’s next growth phase to be driven by 5G monetization and the expansion of its broadband services.
CLSA anticipates continued market share gains for Jio, with the company expected to reach 500 million subscribers and achieve a 47% revenue share by FY25
Financials
In the latest financial update, the company reported net sales of Rs.2,31,784 crore for Q1 FY25, marking an increase of approximately 11.7 percent from Rs.2,07,559 crore in Q1 FY24. Net profit decreased to Rs.17,445 crore, compared to Rs.18,258 crore in the same period last year.
Company overview
Reliance Industries Limited (RIL) is the largest private sector company in India and a Fortune 500 firm. It operates in hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, advanced materials and composites, as well as renewables including solar and hydrogen. Additionally, RIL is involved in retail and digital services.
Written by – Siddesh S Raskar
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