Shares of Mukesh Ambani led Reliance Industries hit a fresh all-time high on Thursday’s early deals. The share price of the company has been on an increasing trend for a week, as it rallied 9.77% from ₹ 2545 apiece to ₹ 2781.
The company’s share price reached its all-time high of ₹ 2786.80 as it surged more than 2% during Thursday’s intraday trades.
Reliance industries is ‘firing on all cylinders’
“The company is poised to give good gross refinery margins in this quarter and refining tailwinds will sustain in the medium term. Both retail and telecom businesses are performing well, thus we can say that reliance is firing on all cylinders,” said Santosh Meena, from Swastika Investmart Ltd.
“The company is expected to generate good cash flows, which will help the company to transform its traditional energy business into a new modern green and clean energy one. Due to the above factors, RIL share price has recently outperformed index and is expected to give good returns in the medium to long term,” Meena added.
Reliance Industries has spent around $ 1.5 billion to acquire technologies across the solar and hydrogen eco-systems. Further, it has outlined its plan to foray into new energy solutions through four Giga factories – an integrated solar photovoltaic factory, advanced energy storage, electrolyzers manufacturing facility, and fuel cells.
Morgan Stanley raises targets
Morgan Stanley has raised the target price on the stock from ₹ 2926 to ₹ 3,253, i.e, by 20% and has an ‘overweight’ rating on the stock. It believes that hydrogen adoption plans are quickly progressing, with Reliance Industries best positioned to capitalize. The global brokerage said that by the end of this decade, hydrogen and related ecosystems will create a $10bn value for Reliance Industries Ltd (RIL) and account for nearly 10% of its earnings as the company invests nearly $4-5 bn in new energy businesses.
Over the past few months, reliance has acquired ownership/stakes in Ambri (liquid metal technology), Lithium Werks (LFP) and Faradion (Sodium-Ion technology).
Once RIL’s solar panel capacity is developed, it can be leveraged internally to not only power its refining and chemicals complex but also to help the production of hydrogen considering its proximity to the sea and existing water management infrastructure at Jamnagar.
Reliance plans to export green hydrogen to markets like Singapore where it already supplies gasoline and diesel. With the help of the PLI Scheme, the investment cost for solar
panel manufacturing to electrolyzers would be 15-20% lower than global peers.
What did investors make?
Soon after Covid 19 was declared a pandemic and a lockdown was imposed in India, Reliance’s share price plunged to ₹1,008 levels. Many long term investors used this opportunity to accumulate the shares and they have been rewarded with 176.45% returns as the stock reached its new all-time high.
If an investor would have invested ₹ 1,00,000 in the stocks of the company at that time, the value of their holdings in the company would have been ₹2,76,450 today!
In the past week, its share price surged by 9.90%. Therefore, ₹ 1,00,000 invested in the share a week ago would have been worth ₹ 1,09,900 today!
