RIL share price target 2024: Where is the most-valued stock on BSE, NSE headed?

Reliance Industries Ltd (RIL), the most-valued stock on domestic bourses, may deliver healthy returns in 2024, target prices of a couple of brokerages suggested. The Mukesh Ambani-led company reported a strong set of numbers for the September quarter and ICICIdirect expects the momentum to continue in the December quarter, with higher premiums to Singapore GRMs and decent petchem spreads.

Other verticals such as Jio, Upstream, retail and digital are also expected to lift consolidated profitability, in addition to the strong performance from the O2C vertical, the domestic brokerage said.

"The stock has been out of limelight for over two years, as it digested strong rally during 2020-21. It is now poised to conclude this consolidation and expected to lead Nifty in 2024. Structurally, the corrective phase over past two years has retraced preceding 18 month rally by just 38 per cent over past 26 months, indicating robust price structure," the brokerage said.

ICICIdirect said the stock digested multiple headwinds, making a strong base in the vicinity of rising 100-week EMA (Rs 2,235) that is held since 2017 except Covid fall. It believes that the stock is headed towards Rs 3,050 from medium term perspective being measuring implication of March22-July 23 range (Rs 2,600-Rs 2,150=450 points) added to Rs 2,600.

In a research note earlier this month, Motilal Oswal Securities said it likes Reliance Industries, as valuations corrected 23 per cent from its peak in September 2021. "RJio’s Ebitda and PAT are expected to clock 15 per cent and 17 per cent CAGR, while Ebitda and profit of Reliance Retail are likely to report 30 per cent and 38 per cent CAGR, respectively, over FY23-25," it said.

This brokerage anticipates a potential for telecom tariff hikes in H2FY25E, and the possibility of an increase in subscriber market share. It has a target of Rs 2,760 on RIL.

UBS recently raised its target price on the stock to Rs 3,000, as it felt investors were yet to appreciate consumer businesses-led earnings growth and suggested that new energy opportunities were not fully priced in. Morgan Stanley suggested a target of Rs 2,821 on the stock. It sees multiple triggers to reverse the past nearly two years of earnings downgrade cycle. In its India Equity Strategy Outlook 2024, the foreign brokerage added Reliance Industries to its focus list.

It said the RIL management commentary on "peak net debt" in FY24, funding all of its investments from operating cash flow (OCF), and a slowdown in capex intensity in 2024, all point to increasing focus on de-gearing balance sheet.

"Other catalysts that could help de-gear and help the stock catch up with peers on multiples include: potential hive off for warehouses in retail and significant ramp-up in retail revenues esp. grocery; inventory restocking for chemicals in India; tightening in global fuel markets, as China caps domestic refining capacity until 2025; and gas/oil production step up – all key to NAV expansion as net debt unwinds with higher OCF, despite our $17 billion annual investment forecast for the next three years," it said.

Jefferies, earlier this month, said RIL underperformed the Nifty and trades at a discount to its 5-year average forward Ebitda. It sees tariff hike, faster broadband subscriber growth and lower capex in Jio and Retail in FY25E. The prevailing RIL market price, it said on December 5, imputes little value to renewables. The brokerage suggested a Buy on the stock with a target price of Rs 2,990.