Reliance Industries held its 44th annual general meeting on June 24, with Chairman Mukesh Ambani unveiling a Rs 75,000-crore green energy plan as he also laid out the growth path for telecom, retail and O2C businesses.
At the 44th Annual General Meeting of Reliance Industries Limited (RIL), chairman Mukesh Ambani made a number of key announcements, including the launch of JIOPhone Next in September, the induction of Saudi Aramco as a strategic partner and a cumulative investment of Rs 75,000 crore in new energy business over the next three years. (Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
Morgan Stanly | Rating: Overweight | Target: Rs 2,262. The company is focused on the next hypergrowth opportunity in clean technology. The ‘MEGA’ plan is unique in a global context and can spur re-rating. The ‘MEGA’ plan raises investment cycle clarity & reduces holding company discount worry. The shift in capital allocation to renewables/decarbonisation capex should lift multiples, while the company’s partnership approach in the new energy business should not cause de-rating.
CLSA | Rating: Outperform | Target: Rs 2,250. The company exhibited hopes of closing the O2C stake sale with Aramco this year. The clarity on the new energy foray is useful. Any big take-up of new smartphones to be an important trigger, while progress in teh omni-channel retail will also be an important trigger.
JPMorgan | Rating: Neutral | Target: Raised to Rs 2,250 from Rs 2,055. The key highlight was $10 billion capex in green/renewable business over three years. The broking house has build in Rs 100 per share in its target price for new energy/renewable business. The company is clearly embarking on a new capex cycle, though it looks smaller at this stage versus previous cycles. Value accretion to increase as the company ramps up execution on these businesses.
Edelweiss | Rating: Hold | Target: Rs 2,105. The new energy push takes precedence over Jio Platforms and retail. Edelweiss view the shift to ‘new energy’ as a significant ESG positive and its will provide the next leg of growth. The broking house believes gas will be a key driver contributing Rs 10,000 crore to EBITDA by FY24. Jio & retail to contribute half of the company’s EBITDA by FY25 and still see huge scope for its O2C business to be a major contributor.
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