
No monetisation plans for Reliance Jio Infocomm and Reliance Retail Ventures Ltd were a dampener in the Reliance Industries Ltd (RIL) annual general meeting (AGM), but the clear roadmap on new energy business impressed analysts. The 47th AGM highlighted RIL's makeover into a deep tech and new-age manufacturing entity, with Jio leading the AI charge and being embedded in every segment. The financial roadmap reiterating RIL’s 2022 AGM target of doubling in value by 2027, besides Retail and Jio also doubling their Ebitda between FY24 and FY28, were other key takeaways.
"However, a key notable was the chairman indicating New Energy becoming as big and profitable as O2C over coming 5-7 years i.e. over Rs 60,000 crore Ebitda by FY31 and projects being CF-positive from Day-1). Besides the progressive start of giga-factories starting end-FY25, RIL has leased land for generating 150BU of power in Kutch, started building its own transmission infra, and secured sites at Kandla Port for green H₂/derivative logistics," said Emkay Global.
The brokerage said no update on Retail or Jio monetisation, was a dampener. Saying execution is the key, Emkay felt that the New Energy segment's earnings would contribute meaningfully from FY28 onwards, as it maintained a positive stance on RIL with a target price of Rs 3,335.
RIL guided for a remarkable surge in the New Energy business with expectation of prospective profitability equalling the current O2C profitability in the next five–seven years, said Nuvama.
"O2C is RIL’s largest profit base currently, contributing towards two-fifth of Ebitda and more than half of attributable PAT. RIL won solar module PLIs, G H2 and electrolyser PLIs, which we estimate translates to cumulative incentive of $0.7 per kg (18% of G H2 value chain). Operations shall commence soon with PV module production to kickstart later this year and battery and electrolysers from late-CY25," Nuvama said while suggesting a target of Rs 3,786 on the stock.
"No big bang announcements," said Antique Stock Broking. This brokerage said a lot of focus was on AI adoption in Jio and building a comprehensive suite of applications, though ramp-up and adoption needs to be seen. The company also announced that
the board will consider 1:1 bonus issue, it said as it suggested a 'Hold' rating on the stock with a target price of Rs 3,213. Most of the visible RIL growth is discounted, Antique said.
MOFSL said while RIL delivered a weak June quarter earnings, the September quarter should benefit from sequentially higher refining margin, the partial benefits of telecom tariff hikes taken in 1Q and an improving retail earnings momentum sequentially on a weak base. It suggested a 'Buy' rating on the stock with a target price of Rs 3,435.
"We value Reliance Retail’s core business at 45 times EV/Ebitda on FY26E and connectivity at 5 times to arrive at a company value of Rs 12.2 lakh crore (Rs 1,797 per share). Reliance Retail’s value in RIL share comes to Rs 1,579 per share for its 87.9 per cent stake). For RJio, we assign a 13 times FY26E EV/Ebitda to arrive at our valuation of Rs 9.6 lakh crore," MOFSL.
Factoring in the 34 per cent stake sale, RJio’s value in RIL comes to Rs 940 per share for its 66 per cent stake).