Reliance Industries Stock Price: Brokerage house Motilal Oswal has described Mukesh Ambani -owned company Reliance Industries (RIL) as its top pick or pick of the year for the year 2025. Stock gave negative returns in the year 2024, which is the first time in the last 10 years. But after this correction, the rescue rewards have become attractive in the stock. The brokerage house has given a target price of Rs 1605, giving a BUY rating on the stock, which is 29 per cent higher than the current price of Rs 1244. Reliance Industries has recorded a consolidated net profit of Rs 18,540 crore with a growth of 7% annually in the third quarter (Q3Fy25), which was better than the market expected.
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Why did Brokerage tell RIL to the top pick
According to Brokerage House Motilal Oswal, Reliance Industries performed less than extensive benchmark equity index in the last few years. Stock has given negative returns in the calendar year 2024, which has been the first time in the last 10 years. Brokerage believes that Reliance Industries has performed a poor performance due to a decrease in growth of Reliance Retail (RR), weak refining and continuous decline in earnings due to Petkem Crack.
After sharp currency (RIL: -17%in the last six months), Brokerage believes that the rescue is attractive, as Reliance Industries is now trading on the beer case valuation of Brokerage. Reliance Jio (RJIO) is on 10 % discount from Bharti Airtel’s current valuation, there is no improvement in the growth of high single digit in core retail revenue and Ebitda and O2C earnings in FY 24-27E.
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In addition, brokerage believes that a decrease in capital intensity, 900 billion FCF generations in FY24-27E, and deleverage, have been currently lower. The introduction of the Gigafactory in New Energy (end of FY 25), the possible listing of Reliance Jio (estimated in 2Hcy25) and Reliance Retail (FY 26) are the major mid -term triggers for growth recovery RIL.
4 major factor
Reliance Jio: 5G monetization through FWA, increase in tariffs major trigger
Reliance Retail: Growth Recovery required for re-painting
O2C: The refining margin may come to the lowest level in the second quarter; Petkem will remain soft
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Why Ril’s poor performance
Brokerage house Motilal Oswal had also said in his previous report that Reliance Industries (RIL) has performed weakly from Broader Benchmark, Bharti Airtel and Organized Rittegal Pears in the last few years, despite the same or better Ebitda growth. RIL’s poor performance was due to lack of Higher Capics in Retail and Reliance Jio as well as FCF generation. However, the captain is on its peak and it is expected that RIL FY24-27 will generate a 1 trillion Rs.
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Brokerage said that we build 10 % consolidated Ebitda and PAT CAGR in FY24-27, which RJIO (tariff hike, market share profit and FWA ramp-up) and Reliance Retail (Constant Footprint and category Experxation) Digit ebitda is possible from Cagr growth. After the fourth first half of the financial year 2025, it is expected that the income of the O2C segment will improve due to improvement in refining margin. However, the fy27 consolidated ebitda of brokerage for O2C and E & P is roughly similar to FY24 levels.
(Disclaimer: Investing in stock is advised by brokerage house. These are not private views of financial express. There are risks in the market, so take the opinion of experts before investment)
