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UBS resumed coverage on Reliance Industries with a buy rating and raised the target price to Rs 1,750
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RIL's retail business is expected to improve earnings due to restructuring and store expansion
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The new energy segment is projected to contribute to operating income from fiscal 2027
International investment firm UBS resumed coverage on Reliance Industries Ltd. with a 'buy' rating and hiked the 12-month target price of the stock. This comes ahead of the RIL annual general meeting on Friday, Aug. 29.
Analysts expect RIL to perform well in the coming 12 to 18 months as the group's earnings transformation of last five years open path towards value unlocking.
Markets will be closely listening to billionaire Mukesh Ambani at the AGM regarding updates on the highly anticipated Jio IPO.
RIL's retail business is projected to improve on earnings as restructuring of B2B comes to a close and store expansion of the past 24 months shows results, according to the UBS note.
Analysts also expect the new energy segment to start contributing to operating income or Ebitda from fiscal 2027 with 10 gigawatt of solar PV and 15 GWh of battery capacity ready by then.
RIL Target Price
UBS has hiked the Reliance Industries target price to Rs 1,750 from Rs 1,550 earlier. "Given upcoming value unlocking potential in these less cyclical and faster growing businesses, we see room for re-rating in the stock," the note said.
Jio, Retail IPO
Highlighting that Reliance Jio's investments in 5G and fibre rollout are largely completed, analysts expect capex to decline to Rs 3,400-4,000 crore annually. An Ebitda growth of 18% will significantly lift free cash flow. "This should open the path for Jio's value unlocking, likely in the form of an IPO," the note said.
Moreover, UBS projects retail growth to accelerate to low and mid teens from FY26. "We believe a full value unlock of retail segment could be 2-3 years away as online businesses and the group's own house of consumer brands may need time to scale up," analysts said.
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