Energy-to-telecom behemoth Reliance Industries Ltd (RIL) tanked nearly 20 per cent from its 52-week high levels amid the ongoing volatility in the domestic equity market. The scrip traded at Rs 2,284.90 on Monday against its 52-week high of Rs 2,855, scaled on April 29 last year. Market watchers look cautious about RIL for the short term amid the ongoing slowdown in the global markets. However, they think that the demerger of retail and telecom businesses will unlock value for shareholders going ahead.
According to Motilal Oswal, Reliance Industries has 32 'Buy', 3 ‘Sell’ and 2 ‘Hold’ calls at present.
While sharing his views on RIL, AK Prabhakar, Head of Research, IDBI Capital Markets said, “Global demand slowdown and weakness in GRM have hit RIL in the recent past. However, we believe that Reliance Industries will bounce back in the long run. We advise new investors to wait till May.”
G Chokkalingam, Founder, Equinomics Research and Advisory said, “We are highly bullish on RIL. It is emerging as a mini economy in itself. Shares of the company will reward investors substantially in the next four years by unlocking value from telecom, retail and renewable energy segments. Our belief is that it would repeat such success in new areas like consumer business and green energy.”
For the nine months ended December 31, 2022, the net profit of RIL increased 6.52 per cent YoY to Rs 47,403 crore. On the other hand, gross sales jumped nearly 32 per cent YoY to Rs 7,37,442 crore during the same period.
Systematix Institutional Equities thinks that strong petrochemical margins to more than offset RIL’s lower GRM, and forecast a 3 per cent CAGR in oil-to-chemicals (O2C) EBITDA. The brokerage initiated coverage on RIL last month with a target price of Rs 2,825, indicating an upside of over 20 per cent from the current market price.
“Net debt could surge (from Rs 1.2 trillion in FY22 to Rs 1.8 trillion in FY25) on enhanced capex in petrochemicals, 5G, organised retail, energy transition and new energy businesses. The mobile tariff hike, listing of retail and Jio and monetisation of O2C and RIL Syngas are a few key upside triggers for the company,” Systematix Institutional Equities said in a report.
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