Brokerages maintain RIL stock rating and target price, turn attention to earnings after AGM

Several brokerages have maintained their ratings and price targets for Reliance Industries, India’s most valuable company, after the Annual General Meeting (AGM).
Analysts are somewhat concerned about market disappointment due to the lack of timelines for Jio and Retail spinoffs. Earnings are expected to be the focus of attention after the shareholders’ meeting, and analysts believe earnings will be the main focus going forward. Notably, their estimate is 20% below consensus.
analyst opinion

Brokerage Jefferies India maintained its Buy rating with a target price of INR 2,950 per share, JM Financials maintained its Buy rating with a target price of INR 2,900 per share, while Kotak Institutional Equities maintained its buy rating and kept its price target at rupees per share. 2,600 yen per share. Nomura maintained its ‘Buy’ rating and maintained its price target at Rs2,925 against Rs2,
per share. Macquarie Research maintains an underperforming rating and has a price target of Rs 2,100, 14.6% below the current market value.
RIL announced that its board of directors has approved the addition of Isha Ambani, Akash Ambani and Anant Ambani to its non-executive directors. Mukesh Ambani will remain at CMD for another five years, focusing on developing and mentoring the next generation of leaders, especially his three children, while strengthening RIL’s organizational culture.
“We are pleased that our decision to appoint the next generation of the Ambani family to RIL’s Board of Directors will allow them to further expand their experience in leading RIL’s major businesses and will serve them well as we continue to grow the organization going forward. I believe we will be in an advantageous position,” said Nomura. In their latest memo, the researchers said: Jio announced plans to launch a nationwide FWA on September 23, and after making major investments in its 5G network in FY24E, capex is expected to drop significantly in FY25E. ROTC’s entry into wind energy for renewable energy supply was predictable.
RIL emphasized that retail is the number one brick-and-mortar retailer, but did not elaborate on its growth plans or possible IPO timeline. The company noted strong interest from global investors in its retail investments. Jefferies India expects its Jio capex to decline in FY25E as investment in its 5G network is almost complete. Management’s goal is to keep net debt:EBITDA below 1x. Earnings remain unchanged because there is no new information about short-term goals. No significant new investments were announced.
growth promoter

JM Financial thinks the net debt worries have gone too far. They trust RIL’s industry-leading capabilities across multiple sectors and believe they will deliver a strong CAGR of 14%-15% over the next 3-5 years. JM expects RIL’s net debt to peak in FY24 and then decline due to moderate capital spending (Rs increasing internal cash generation; net debt to EBITDA ratio below 1x ( 0.9x as of March 23) provides certainty, the company said.

Motilal Oswal Securities expects the company to achieve a consolidated sales/EBITDA CAGR of 12% in FY2023-25. With significant advances in technology and ambitious growth targets, retail, telecommunications, and new energy could become growth engines over the next two to three years.
“The Company values ​​its Refining and Petrochemicals divisions at 7.5x EV/EBITDA with a single company valuation of Rs.904 per share. /share attributed to RJio and Rs.1,485/share attributed to Reliance Retail.Recent share sales and New Energy related share valuation at book value Rs.16/share” Motilal report added, Oswal added.
Nomura said various sectors had a positive outlook, saying O2C could benefit from an increase in global oil demand of 2.2 million barrels per day in the second half of 2023. CDU new entrants lagged slightly behind demand growth of 500,000 barrels per day. Retail growth is solid due to store expansion and operational efficiencies. Jio could outperform if tariff hikes in FY2025 exceed expectations.