Reliance Industries shares trade near 52-week low. Jefferies has ‘Buy’ tag

Q2 Earnings

A global brokerage firm, Jefferies, noted that this could result in accelerated market share shifts and, in theory, an effective duopoly, which could add 93 per share upside potential. However, there is growing concern that telecom tariff increases may not occur until after general elections in May 2024.

Reliance Industries Ltd. (RIL) offers 36% upside to our revised target price of 3,060 and 28% upside even if tariff hikes don’t materialise until March 2025, the note noted. “Although we decrease Reliance Jio’s estimates by 1-6% to incorporate tariff hike delays, we reaffirm BUY rating,” the report said.

“In this note, we address the key investor concerns on RIL’s telecom operations in light of our recent note addressing key investor concerns on RIL, which addressed the key issues on capex, leverage, and slower growth in retail. Together with increasing expenditure and leverage, delays in timing tariff increases—possibly after the general elections in May—have been identified as the main issue over Reliance Jio in our recent discussions “Jeffreys tacked on.

Reliance Industries’ stock is trading close to the 52-week low of $2,180 per share that it experienced earlier this week on the BSE. The stock has fallen more than 13% so far in 2023. (year-to-date or YTD).

Reliance Industries Ltd. (RIL) is still seen by global brokerage JPMorgan as a relative outperformer in CY23 despite what may be a generally weak earnings environment. Nevertheless, various potential catalysts are expected to assist drive absolute outperformance in CY24–CY25.

We predict that the refining sector will continue to be strong, that the reopening of China will likely lead to a rebound in Petrochem spreads from decadal low levels, and that E&P volume growth will drive profitability growth. The next phase of expansion should be driven by continuous investments as RIL continues to offer many growth options across industries (petrochem, E&P, telecom, retail, financial services, new energy) “JPM had stated in a note the previous week.

The opinions and suggestions listed above are not Currency Veda’s rather, they represent the opinions of certain analysts or brokerage firms.