The broking firm Motilal Oswal has maintained the rating and target price on the stock of Reliance Industries. However, it said that the company might see some pressure in oil to chemicals earnings in the first quarter of FY25 as volume is expected to be muted sequentially. It has a “Buy” rating, with a target price of Rs 3,245 per share.
However, the company’s oil-to-chemicals profitability to be healthy over the next 1.5 years on the back of the refining net capacity additions in CY24 are trailing oil demand growth. Also, CY23 was the last year of substantial supply growth of oil refineries. “Standalone EBITDA stood at Rs 20,000 crore in Q4 FY24 (10% above our estimate), supported by better feedstock sourcing, higher domestic product placement, and increased sales volume QoQ,” said Motilal in a research report.
The brokerage firm Motilal has raised the capital expenditure estimates to Rs 1.2 lakh crore each year for FY25 and FY26. To segregate, Telecom will have Rs 39,200 crore every year, Rs 65,000 crore in standalone business, and the rest in other business segments.
JM Financials said that they maintained the “Buy” rating on the stock as concerns over leverage are overdone as expectations are that the company’s net debt will decline gradually. The capital expenditure of the company will not just only moderate but also be fully funded by a gradual increase in internal cash generation.
The brokerage house JM Financial said that Reliance Industries could still drive a robust 14-15% earnings per share growth over the next 3-5 years with Jio’s ARPU expected to rise at 10% CAGR over FY23- 28. The company’s ARPU is on “a structural uptrend given the industry structure, future investment needs, and the need to avoid a duopoly market — A Giant Digital Leap.” On the downside, JM Financial sees continued high capex, resulting in rising net debt with limited earnings visibility from new projects. Also, weak subscriber addition, limited ARPU hike, and weak downstream margins due to macro concerns as negative for the company.
Bucking the trend, Centrum Broking slashed the FY25 earnings estimates by 3.1% due to pressure on petchem. However, it raised earnings estimates by 4% for FY26. It has kept the “Buy” rating unchanged with a revised target price of Rs 3,481 from Rs 3,299 earlier.
“We marginally increase our FY26 estimate on account of better subscriber additions in Jio and higher realization for KG basin’s gas output and better O2C earnings. We maintain the “Buy” rating with a revised target price of Rs 3,227,” said Antique Broking. The brokerage house earlier had a target price of Rs 3,005. The price target was raised on account of higher earnings and also as we attribute a higher multiple to the telecom business due to several tailwinds in the sector.
