Reliance Industries share price rises more than 20% year to date: Morgan Stanley expects more gains of around 13%

Stock Market today: Reliance Industries share price that remains in focus following telecom price hikes has gained more than 20% year to date. As the Nifty heavy weight and the leader enjoys highest market cap of more than $225 billion, Morgan Stanley expects the stock adding another $60-100 market capitalisation during the ongoing (fourth) monetisation cycle, suggest news reports. Their base case target price of ₹3540 indicates more gains of around 13% for the stock trading at around ₹3130 levels

Global brokerage Morgan Stanley believes that Mukesh Ambani's Reliance Industries (RIL) is set for a significant growth and the global brokerage firm is anticipating Reliance Industries' market capitalization rising by between $60 and $100 billion during the company's fourth monetisation cycle.

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The brokerage firm credits Reliance Industries' investment plans for the growth potential, as per news reports by CNBC TV-18 and others.

Reliance Industries is making investments in to the New energy and new chemicals businesses from the cash flows accrued during the ongoing monetisations. According to Morgan Stanley, the current monetisation cycle is distinct from earlier ones due to its backing by a robust domestic demand, business upcycle, and reduced competition.

"Investments in new energy, retail expansion, and repurposing of existing energy businesses are expected to drive consistent earnings growth beyond the next three years if the return on capital employed (ROCE) remains above 10%." News reports suggest Morgan Stanley is anticipation a robust 10-12% annual earning growth (CAGR) over FY24-27.

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The telecom vertical for Reliance Industries represented by Jio, is also seeing improved prospects led by the recent price hikes announced by most of the companies in the telecom sector.

Currently in their model for telecom, Morgan Stanley has said that they have assumed cumulative average revenues per user (ARPU) increases of 19-20% in the July-September quarter or Q2FY25 and also in 3QF25 .

They had also noted in their earlier (27 June report) that there is an increased focus on monetization for a) increasing the threshold for getting unlimited free data for 5G, which could help in some upgrades, and b) launching new value-added services for an additional charge

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