Reliance gets a thumbs up from Jefferies, here's why the foreign brokerage feels stock can gain another 20% | Mint
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Business News/ Markets / Stock Markets/  Reliance gets a thumbs up from Jefferies, here's why the foreign brokerage feels stock can gain another 20%
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Reliance gets a thumbs up from Jefferies, here's why the foreign brokerage feels stock can gain another 20%

Stock Market Today- Reliance Industries that had underperformed Nifty by almost 9% year to date, has started to see an up move. Among multiple triggers renewable equipment business is also likely to drive earnings growth and Jefferies target price indicates more than 20% gains for the stock

Reliance Industries to benefit from renewable equipment businessPremium
Reliance Industries to benefit from renewable equipment business

Reliance Industries share price gained more than 1% on Wednesday. The up move in Reliance Industries having maximum weightage in the Nifty remains positive for the support and upside to the indices. Reliance Industries underperformed Nifty during the calendar year by around 9%.

The outlook for Reliance Industries while is improving led by rebounding Refining margins in Oil to chemicals business. The pet-chem oversupply continues, however, this is not a big risk to earnings now as Retail and Telecom , the consumer facing business contribute more than half to operating performance say analysts. As they wait for triggers for telecom business prospects led by tariff hikes or in the retail business there are few more opportunities that can contribute to earnings growth.

Also Read-JSW Infra shares locked at 8% upper circuit to hit 52-week high; TP raised by 2%

Analysts at Jefferies India expect gains for Reliance Industries led by the renewable equipment business

As per Jefferies, Reliance Industries will commission phase I PV (photovoltaic) module and storage capacity mid-CY2024. Chinese overcapacity has weighed on renewable equipment profitability globally. Government’s ambitious installation target, lower bidding intensity, custom duty on Chinese imports, implementation of ALMM (approved lit of models and manufacturers) next fiscal and possible exports to the US at premium prices should aid economics feel analysts. 

Indian module exports are already up 5 times till date in FY24 driven by US. They see  little value being imputed to renewables in Current market price and expect gains of more than 20% for stock trading at 2,460 levels to a target price of 2,990.

Also read- Adani Ent. Adani Wilmar, Adani Power other group stocks gain up to 17%

As per Jefferies, the Reliance Industries stock is trading at a discount to its 5-year average forward EBITDA (earnings before interest tax depreciation and amortization). They see tariff hike, faster broadband sub growth and lower capex in Jio as well as Retail in FY25  The risk reward remain favorable as per analysts as teher exist multiple triggers in calender year 2024.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 07 Dec 2023, 09:48 AM IST
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