Reliance Industries share price may jump as much as 35% from the current price, helped by faster revenue growth in the company’s retail arm and accelerated broadband traction in Jio among other factors, said Jefferies in a note. The brokerage firm put a bull case target price of Rs 3,450, keeping its ‘Buy’ rating on Mukesh Ambani’s RIL stock. The brokerage added that considering a 16% growth in EBITDA for FY24E, the current risk-to-reward ratio is favorable.

RIL target price in different scenarios

Bull case

In the brokerage’s upside scenario, it projects that RIL could soar up to 35% during the next 12 months, targeting Rs 3,450 apiece. The upside scenario could be resultant of a recovery in GRMs or petrochemical margins, ahead of the brokerage’s estimates. A faster consolidation in telecom leads would lead to an upside in Jio. Additionally, the possible listing of Jio re-rating valuation multiple would allow the ticker to move closer to Jefferies’ upside target. 

Downside risks

In its downside scenario, Jefferies projected that the share price would fall to Rs 2,250, down 12% over the next 12 months. A lower-than-expected ARPU or subscriber numbers would lead to the fall, with the valuation multiple de-rating to 8x. On account of the slower pace of China’s re-opening, Reliance Industries’ refining/petchem margins might be lower or the elevated cash burn in e-commerce could lead to the valuation multiple falling to 20x.

Base case

According to Jefferies’ base case scenario, a 20% EBITDA CAGR in Jio through FY22-25E, at around 472 million subscribers with an ARPU of Rs 200, could push RIL towards a share price of Rs 3,125, up 22%. Other factors that will help achieve this base case would be 36% EBITDA CAGR in retail, 19% EBITDA CAGR in refining and 16% EBITDA CAGR in petchem over FY22-25E.

Factors that are driving growth in Reliance Industries


Brick and mortar will drive growth, despite the intensity of the company’s capex falling, said Jefferies. Footfall is likely to improve as a result of the amalgamation with Future Group floor space, which will drive improvement in throughput per square foot resulting in operating leverage. The brokerage expects faster revenue growth and higher margins on 32 million square feet that has been added over FY 2022-23 (on a 34 million sq ft base).

Oil to Chemicals

On the O2C business, Jefferies expects an EBITDA growth of 9% in FY24E, with limited downside. As a result of Russia’s share of India’s oil imports coming in at 42%, Reliance Industries gains an additional margin of $5/bbl. The margins on petrochem products are improving on inventory correction, lower US ethane prices and improving demand in China. 


Jio’s broadband traction will aid 5G monetisation and margin improvement. With a potential of 100 million broadband addressable market, Jio’s market share targets are aggressive, cornering 55% incremental market share in broadband subscriber additions. Since the cost of data on the 5G spectrum is a fraction of that of 4G, margins are likely to improve.

Green Energy

5 GW HJT solar PV module capacity and 5 GWh LFP stationary storage will begin by mid 2024 and the PV module capacity will be scaled up to 20 GW by end-CY25. Majority of initial production will be used in captive generation plants (20 GW capacity) that should come online by CY26.

Currently, the share price is trading at Rs 2,544.75 apiece, down 0.74% from yesterday’s closing price on the NSE. Year-to-date, Reliance Industries has lost 1.21% thus far.

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