Home/ Markets / Reliance Industries shares trade near 52-week low. Jefferies has 'Buy' tag

While there is a growing concern that telecom tariff hikes may only take place after general elections in May 2024, global brokerage Jefferies noted that this could lead to accelerated market share shifts and in theory an effective duopoly which could add 93 per share upside potential. 

“While we cut Reliance Jio's estimates by 1-6% to factor tariff hike delays, we reiterate BUY rating as Reliance Industries Ltd (RIL) offers 36% upside to our revised target price of 3,060 and 28% upside even if tariff hikes don't materialize till March 2025," the note stated.

“Following up on our recent note addressing key investor concerns on RIL which addressed the key concerns on capex, leverage and slower growth in Retail, we look at the key investor concerns on RIL's telecom operations in this note. In our recent interactions, delays in timing of tariff hikes - potentially after the general elections in May-24, have been cited as the key concern on Reliance Jio, besides rising capex and leverage," Jefferies added.

Shares of Reliance Industries trade near 52-week low of 2,180 apiece that it had hit earlier this week on the BSE. The stock is down more than 13% in 2023 so far (year-to-date or YTD).

In CY23, global brokerage JPMorgan continues to see Reliance Industries Ltd (RIL) as a relative outperformer in what could be a sluggish earnings environment overall, but see multiple potential catalysts over CY24-25 to help drive absolute outperformance.

“We see continued strength in refining business, a likely rebound in Petrochem spreads from decadal low levels from China re-opening, and volume growth in E&P – driving earnings growth. RIL continues to offer multiple growth optionality across businesses (petrochem, E&P, telecom, retail, financial services, new energy) and ongoing investments should drive the next leg of growth," JPM had said in a note last week.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Updated: 24 Mar 2023, 10:04 AM IST
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