RIL share price falls 2% after Q4 results, brokerages see up to 22% upside; check target price

RIL share price falls 2% after Q4 results, brokerages see up to 22% upside; check target price

Reliance Industries share price fell over 2% on Monday after the company reported a 22.5% on-year growth in consolidated net profit at Rs 16,203 crore for the quarter ended March, on the back of bumper oil refining margins, steady growth in telecom, digital services and retail business. RIL shares plunged 2.6% to hit an intraday low of Rs 2,542 apiece on the BSE in opening deals, dragging Sensex by 800 points. The stock has rallied 6% so far this year and brokerages see up to 22% potential rally going forward, given that earnings growth prospects for RIL remain strong, and the company’s new-energy business is expected to provide the next leg of growth opportunities, besides aiding its conventional oil-to-telecom business.Stock Talk: Should you buy, hold or sell Reliance Industries (RIL) shares?Motilal Oswal: BuyTarget price : Rs 2,800; Upside: 18%

Reliance Industries’ earnings trajectory is expected to improve further over the next 12 months driven by strength in refining, further hike in telecom tariffs, and trong growth in retail business. Analysts at Motilal Oswal value RIL’s standalone segment at 7.5x, telecom at 17x FY24E, and retail at 31x FY24E EV/EBITDA. “With a target price of Rs 2,800, we reiterate our BUY rating on the stock. While it is difficult to value the recent foray into renewables as well as the future foray into chemicals, the current valuation multiple of the standalone business may see an upward revision going forward,” the brokerage said. Key risks to Motilal Oswal’s rating could be technology risks associated with the new age renewables, high capex as well as similar large-scale announcements by other global players.

Edelweiss Securities: BuyTarget price: Rs 3,205; Upside: 22%

According to Edelweiss Securities’ analysts, RIL’s strength lies in its ability to build businesses of global scale and execute complex, time-critical, and capital-intensive projects which will prove advantageous as it embarks on large investments in all segments. The brokerage expects RIL’s consumer business (Digital and Retail) to contribute around 50% of EBITDA from FY25 given its strong expansion and customer base. “We believe refining margins in Asia will rise due to a “paradigm shift in regional refining dynamics” from West to East, which will favour a complex refiner like Reliance,” they said. It retained the ‘buy’ call on the stock with a target price of Rs 3,205.

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