Reliance Industries Ltd (RIL) impressed stock analysts with its December quarter results, which lead a few brokerage upgrade the stock to 'Buy' from "hold" earlier. Analysts said the stock is trading at attractive valuations, having falling 19 per cent in the past six months and could see buying ahead.
"We upgrade RIL to Buy from Add on attractive valuations. RIL’s consolidated Q3FY25 Ebitda stood at Rs 43,800 crore – a 4 per cent beat to our estimate, as Retail/O2C was 10 per cent/6 per cent above our estimate, while Upstream and Jio were largely in-line. Top-line growth of 9 per cent YoY in Retail vs expectations of a marginal decline resulted in better profits amid stable margins," said Emkay Global.
Consolidated PAT at Rs 18,540 crore beat Emkay's estimates by 3 per cent, amid higher share of minority interest and lower other income.
"We largely retain FY25-27E earnings, while trimming our Sep-25E target price by 6 per cent to Rs 1,570 due to 10% cut in Retail multiple. New energy development and vertical monetization are key triggers for the stock," it said.
Antique Stock Broking also upgraded the RIL stock to 'Buy' from 'Hold'. It said the Q3 beat was driven by strong retail and O2C performance. Even as Telecom Ebitda lagged due to incomplete absorption of July tariff hikes, Retail surprised with 18 per cent QoQ revenue growth driven by the festive season.
"Post the strong results, we revise our FY25-27E EBITDA up by 1-2 per cent, driven by an upgrade in O2C, O&G, and Telecom, offset by a slight cut in Retail. FY27E Telecom EV/Ebitda multiple has been raised to 12x (from 10x) to align with Bharti Airtel, though the capex intensity is higher thanks to a more aggressive FTTH/ AirFiber growth," it said.
Antique suggested a revised target price of Rs 1,456 per share against Rs 1,409 earlier.
Nuvama said RIL offers long-term growth visibility. The oil-to-telecom major would be among top 10 global producers post-petchem expansion, it said adding that RIL has strong growth visibility on expectation of recovery in petchem margins.
"New Energy’s foray to equal O2C’s profits in 5–7 years; it shall add 50%+ to consolidated PAT and much higher value given clean energy. iii) Deen Dayal Port and Khavda for 50GW RE/2 MMT GH2; retain ‘BUY’ with a target price of Rs 1,677," it said.
MOFSL ascribed an equity valuation of Rs 530 per share and Rs 6,250 per share to RIL’s stake in JPL and RRVL, respectively.
"We assign Rs 47 per share (Rs 63,000 crore equity value) to the New Energy business and Rs 26 per share to RIL’s stake in Disney JV (based on transaction value). We reiterate our BUY rating with a target price of Rs 1,600," MOFSL said.
Among foreign brokerage, maintained its 'Buy' on RIL with a target price of Rs 1,660. CLSA retained its 'Outperform' with a target price at Rs 1,650 per share MS stayed 'overweight' on Reliance Industries and suggested a target price of Rs 1,662.