Reliance Industries Limited (RIL) share price hits 2200 INR again after a break of good number of days. Many big businesses are operated under the name of Reliance like energy, petrochemicals, textiles, natural resources, retail and telecommunications. Reliance is the largest company in India according to market capitalisation and being traded publicly. Not only this, Reliance recently crossed the total revenue of government controlled Indian Oil Corporation & is the only company in India to do so.
Many equity & securities firms have given a target price of 2500 to Reliance in coming months. The current flash is
RIL Share Price: Reliance Breaks The Level Of 2200, What’s There In Coming Months? What will make Reliance Touch 2500 Levels?
- Business Enhancement & Improvement: As we already discussed & know that Reliance has many big businesses in India, its gradually improving itself to improve its business outlook. From old petroleum & textile business to new era’s internet business i.e Reliance Jio, the company is moving towards advancements. This is proven by the EBITDA data which is 53%-58% from 50% in FY21.
- Oil To Chemical Integration: Reliance oil to chemical business is differently placed. Even if the global oil consumption takes time to revive, the refinery business will definitely pick up from FY23. The market is reacting in the correct way with the demand & supply of oil. We factor in KG D6 sales volumes of 15/18mmscmd through FY22/23ii, respectively, and assume no material changes in its realizations—around $4 per million British thermal units (mmbtu).
- JIO: It’s All About Internet: JIO hasn’t launched its IPO, hence the business comes under the same name as Reliance Industries Limited. JIO has recently launched very attractive offers for its customers. There is also an expected launch of Google devices in collaboration with JIO. It has all the capacity to boost its spectrum holdings as compared to other networks. Its FTTH (Fiber To Home) business will also eventually grow as the construction work gains some speed. The launch of the smartphone with collaboration with Google is highly expected to be a game-changer for Reliance Business.
- Reliance Retail In The Pandemic: Reliance Retail has boomed up unexpectedly especially in this macro environment. Reliance has definitely seen this as a positive opportunity to strengthen its supply chain “Our forecasts assume 23 percent and 32 percent sales growth estimates in FY22 ad FY23 and EBITDA margins of 6.1 and 6.3 percent versus 5.5 percent seen in FY21ii.” MoneyControl wrote in its blog.
Reliance reported a net cash value of 2200 Cr in FY21 and that too adjusted for spectrum liabilities.
What should investors do with Reliance Industries Limited stock?
Many brokers and security firms remain positive on RIL. The Venture Guide also gives retail investors to stay positive on the RIL Stock as it might reach 2500 INR in the coming months. RIL O2C Business has been valued at $63 Billion. IIFL Telecom also valued the JIO’s EV at $82.9 Billion which is also based on discounted cash flow (DCF).
According to the Venture Guide and Money Control analysis Reliance, Retail valuation is around $67 Billion based on 35x FY23ii EBITDA. We are impressed by the pace of sales per EBITDA ramp-up at Reliance Retail and the faster-than-expected normalization of operations would compel us to move the retail valuation even higher.
Hence, We give a buy/hold call for this stock for a few months. Happy investing.