“Reliance Industries stock has cooled off from its all-time highs as a delay in the possible IPOs of Jio and/or Retail led to reduced excitement towards the stock. Slowing growth in the retail business has been another negative,” said CLSA’s analysts in a client note.
ET BureauReliance at Attractive Entry Point
The stock has fallen 21% from its 52-week high of ₹1,608.95 in July this year as against the 3% decline in the Nifty.
CLSA’s most optimistic projection for the stock price is ₹2,186, implying a 72% upside, driven by possible “value unlocking” for both Jio and Retail, along with the scale-up of the new energy business to the size of the oil and chemicals business.“While improvements in Jio and Retail remain at the centre of attention, the start of new energy projects is a potential catalyst that the stock is possibly ignoring,” said the firm’s analysts. Reliance’s fully in tegrated 20GW (gigawatt ) solar gigafactory is set for launch in three to four months.
“We derive a solar business value of $30bn (billion), based on a discount to recently listed peers, yet Reliance stock is trading within 5% of our rainy-day valuation (assigning zero value to the new energy business),” said the analysts. “Accounting for about 90% of global manufacturing, China dominates the world’s supply chain, but significant tariff restrictions on imports of Chinese PV products have opened the lucrative US market for non-China exporters like India.”