Mumbai, Jan 9, 2025
Global brokerage Goldman Sachs on Thursday lowered its target price for Reliance Industries Ltd (RIL), while maintaining ‘buy’ rating for the diversified group.
The brokerage reduced RIL’s target price to Rs 1,595 from its previous target of Rs 1,630. The revised target price still suggests a 26 per cent potential upside (as compared to the stock’s closing price on Wednesday).
“We believe the sell-off in RIL’s shares is overdone as the share price is now near our bear case scenario,” the brokerage said in a note.
The brokerage has flagged the points that are seen to be not going in RIL’s favour. This includes the company’s return inflection thesis “taking longer than expected”, it said.
In the October-December quarter (Q3 FY25), Goldman Sachs sees RIL’s EBITDA to “remain largely flat” on annual basis, despite being expected to grow 5 per cent sequentially.
The brokerage has also lowered the company’s EBITDA estimate for the period between fiscal 2025 to fiscal 2027 by up to 4 per cent.
However, Goldman Sachs is optimistic about RIL’s return expansion in fiscal 2026, with returns of telecom arm Jio already seen to be inflecting.
It expects the earnings before interest, taxes, depreciation and amortisation to grow 24 per cent year-on-year in fiscal 2026.
Meanwhile, Morgan Stanley in a note maintained the ‘overweight’ rating on RIL’s stock, while setting a target price of Rs 1,662. The revised target suggested a 34 per cent upside potential.
“In 2025, as new refining capacity is absorbed, retail profitability improves, and new energy cash flows kick in, re-rating should regain traction,” the brokerage said.
In Q3 FY25, Morgan Stanley expects the company’s EBITDA to remain flattish on an annualised basis despite rising 4 per cent sequentially, as “telecom tariff hikes and tightness in global fuel markets filter through in profitability”.
Bernstein has set a target price of Rs 1,520 apiece for RIL, which suggested an upside of 25 per cent.(Agency)
