Reliance Industries - The Mammoth Is Massively Expanding: Systematix Initiates Coverage

Systematix Research Report

We initiate coverage on Reliance Industries Ltd. on a positive note. We forecast modest 13% compound annual growthr rate in Ebitda over FY23E-FY25E, largely led by retail and Jio. Robust 22% Ebitda growth in the consumer business would continue, in our view, primarily led by 23% growth in telecom and 19% in retail during this period.

We expect strong petrochemical (petchem) margins to more than offset its lower gross refining margin, and forecast 3% CAGR in oil-to-chemicals Ebitda.

While the upstream business may benefit with 58% higher volumes FY24E onwards, lower realisations could limit Ebitda growth in this business to 7%.

Net debt could surge (from 1.2 trillion in FY22 to 1.8 trillion in FY25E) on enhanced capex in petrochemicals, 5G, organised retail, energy transition and new energy businesses.

RIL has underperformed Nifty by 3.8% in last one year, with the stock price hovering at Rs 2,300-Rs 2,800 levels. RIL’s option could rise, once its new energy business nears commencement. Mobile tariff hike, listing of retail and Jio and monetisation of O2C and RIL Syngas are a few key upside triggers.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.