The company’s ambitious plans, especially the upcoming 5G launch, foray into the FMCG sector and new energy investments were discussed at the 45th Annual General Meeting (AGM) of Reliance Industries Limited (RIL).
The AGM laid out a succession blueprint with expected lines on new development platforms and a new phase of capital expenditure. Reliance Jio laid 2 tn investment plan on 5G with pan-India roll-out by December 2023, while retail announced foray into Fast Moving Consumer Goods (FMCG) business. The renewable transition roadmap provided capital expenditure and commissioning timelines.
“We incorporate higher capex and earnings from Jio and O2C. To factor in higher capex in Jio, traditional O2C and new energy businesses, we increase our capex for FY23/24/25E to 1.59/1.55/1.59 tn respectively. Global brokerage Jefferies said, “We build US$9bn valn of O2C capex and higher subscriptions in the home broadband segment. It has maintained its buy rating on Reliance Industries (RIL) shares with a target price of Rs. 2,980.
Given the huge technological advances and ambitious growth targets, retail, telecommunications and new energy could be the next growth engines in the next two to three years. However, according to Motilal Oswal, this could dent its current single-digit return ratio in the near term.
“We expect consolidated revenue/EBITDA to be 13%/15% CAGR in FY 2012-24, not impacting any incremental growth from 5G capex, new energy and other segments. Given the huge technological advances and ambitious growth targets, retail, telecommunications and new energy could be the next growth engines in the next two to three years. However, it may reduce its current single digit return ratio in the near term,” the note said. It has reiterated its buy rating with the target price. 2,880.
Analysts at Prabhudas Lilladher believe that RIL’s business segments are very well positioned to benefit from segment tailwinds, given its solid leadership position and well-integrated business structure. Furthermore, the company is best positioned to grow new businesses and pursue inorganic opportunities with its liquid BS. It has also maintained ‘Buy’ at a price target of 3,165.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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