Reliance Share Ready to Profit by 57 Percent. Experts Said Buy at This All Time Low Valuation.

Reliance Industries Limited (RIL) has been in focus after international brokerage firm Jefferies projected a 36% upside in its stock price. In its latest report dated January 8, 2025, Jefferies reaffirmed its “Buy” recommendation with a target price of ₹1,690 per share, significantly higher than the stock’s Tuesday closing price.

Stock Performance and Current Valuation

Following the Jefferies report, Reliance Industries’ stock saw a 2% jump during intraday trading on Wednesday, reaching ₹1,264.25 on the NSE by 2:30 PM. Despite the recent uptick, RIL underperformed the Nifty 50 by 15% in 2024, marking its first year of negative returns in nine years. Concerns about the medium-term growth of its retail segment and slower earnings growth in FY24 weighed on investor sentiment.

Interestingly, Jefferies noted that RIL’s valuation is now at its lowest since March 2020, during the onset of the COVID-19 pandemic, presenting an attractive entry point for long-term investors.

Future Growth Drivers

Jefferies remains optimistic about Reliance’s growth trajectory, projecting significant improvements in key business segments by FY26.

1. Retail Segment:
   • Expected growth of 15-16% CAGR in the medium term.
   • Robust expansion plans and increased consumer spending are likely to fuel this segment.
2. Jio Platforms:
   • A potential IPO for Reliance Jio could unlock immense shareholder value.
   • Anticipated growth in ARPU (Average Revenue Per User) without major tariff hikes.
3. Oil-to-Chemicals (O2C):
   • Recovery in gross refining margins (GRMs) and steady demand for petrochemicals is expected to boost profitability.

Jefferies forecasts a 14% CAGR in EBITDA across all segments for Reliance by FY26, underscoring its diversified growth potential.

Positive Outlook from Bernstein

In addition to Jefferies, Bernstein also expressed optimism about Reliance Industries. The brokerage firm maintained an “Outperform” rating and set a target price of ₹1,520, projecting a strong recovery in 2025.

Bernstein’s Key Projections:

• 12% ARPU growth in Jio without tariff hikes.
• Double-digit EBITDA growth in the retail segment.
• Improved gross refining margins contributing to O2C segment profitability.

Analyst Consensus

Out of the 39 analysts covering Reliance Industries:

• 33 analysts have a “Buy” rating.
• 3 analysts recommend “Hold”.
• 3 analysts suggest “Sell”.

Mirae Asset Securities has given the highest target price of ₹1,950 per share, indicating a 57% potential upside from current levels.

Key Catalysts for Reliance in 2025

1. Valuation Opportunity:
   Current valuations make Reliance an attractive bet for long-term investors, with several analysts projecting significant upside potential.
2. Business Diversification:
   • Reliance’s stronghold in retail, telecom (Jio), and O2C segments ensures diversified revenue streams.
   • Jio’s potential listing is a significant catalyst for future growth.
3. Recovery Trends:
   Improved demand across O2C and retail, coupled with Jio’s consistent performance, signals a promising recovery in FY25 and beyond.

Table: Analyst Ratings and Target Prices for Reliance Industries

*Based on the current market price of ₹1,264.25.1