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Reliance Industries stock may extend stellar rally; analysts upbeat, check target price

Reliance Industries share price is up 7% so far this month.
(Image: REUTERS)

Mukesh Ambani’s Reliance Industries may extend its current rally and surge another 14% from today’s opening price, analysts say. The stock price has already jumped 7% so far this month, adding to its strong upward momentum that began in July this year. Analysts are still upbeat on the prospects of RIL’s share price, expecting the stock to cross Rs 2,700 per share. Fundamental levers such as value unlocking in retail and digital business, with a possible IPO ahead are seen as key drivers for Reliance Industries stock price. Currently, RIL’s share price is quoting a price of Rs 2,420 apiece.

Sharekhan – Buy
Target price – Rs 2,700 per share

Analysts at Sharekhan expect a continued recovery in RIL’s earnings led by a cyclical recovery in oil to chemical margins, gradual telecom tariff hike, high growth in retail, and ramp-up of new revenue streams such as broadband services and new commerce. “A potential deal in O2C business and further value unlocking in the digital and retail businesses (with a likely IPO for consumer business in next few years) are key catalysts for the stock and would add to shareholders’ returns in the coming years,” they added.

Mukesh Ambani’s investment towards new energy is seen as a step toward clean energy with the potential to create long-term value. “We believe that RIL would collaborate with global leaders in the clean energy space for technology and build large projects for economies of scale,” analysts said. Further, the government could come up with supportive policies such as PLI scheme for electrolyser and same would reduce overall capital cost and create long-term value for RIL. 

ICICI Direct – Hold
Target price – Rs 2,480 per share

ICICI Direct has initiated the coverage of Reliance Industries with a hold rating while expecting the consumer business to be the growth driver, going ahead. The company has a strong balance sheet post-fund-raising while its traditional business will continue to generate steady cash flows. We initiate coverage on the stock with a hold recommendation,” ICICI Direct said.

Reliance Industries’ investments into various smaller companies and startups over the years is also seen as something positive by ICICI Direct analysts. “The company has invested over ~US$1.9 billion over the last five years. We believe these investments provide an option value in the overall opportunity and complete the digital ecosystem creation objectives,” they added. 

Bonanza Portfolio – Buy
Target price – Rs 2,750 per share

On the technical front, Vishal Wagh, Head of Research, Bonanza Portfolio expects RIL’s share price to surge to Rs 2,750 per share, becoming the next market mover. “Reliance has given a breakout around Rs 2,340 levels above the triangle post that it has hit all-time high of Rs 2,480. It is currently consolidating between the range of Rs 2,380 – Rs 2,455.,” he added. 

Vishal Wagh said that RIL stock is creating a poll-flag formation. If Reliance sustains above “Rs 2,400 levels for next three to four session then it will cut a higher range of the flag and next target will be the height of the poll which is around 250 points. This technical formation leads us to the target of Rs 2700+,” he added. Investors have been advised to keep stop loss below Rs 2,340 levels.

(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

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