Shares of Mukesh Ambani-led Reliance Industries (RIL) today become the first listed Indian entity to cross the Rs 20 lakh crore market capitalisation milestone after the stock rallied up to 1.89% to hit fresh 52-week high of Rs 2957.80 on BSE.

In the last two weeks alone, the stock’s market value has gone up by Rs 1 lakh crore as the Rs 19 lakh crore-level was touched on January 29. So far in the calendar year, the share price of India’s most valued stock has gone up by about 14%.

The Mumbai-based oil-to-telecom conglomerate has been one of the biggest wealth creators in Dalal Street’s history. RIL shares had hit the Rs 1 lakh crore market cap mark in August 2005, while the Rs 10 lakh crore level was achieved in November 2019.

At Rs 20 lakh crore, RIL remains India’s most valued firm and way ahead of TCS (Rs 15 lakh crore), HDFC Bank (Rs 10.5 lakh crore), ICICI Bank (Rs 7 lakh crore) and Infosys (Rs 7 lakh crore).

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RIL’s December quarter results were largely in-line with market expectations with its O2C EBITDA dropping 14% QoQ to Rs 140.6 billion due to maintenance in multiple units combined with lower cracks & deltas. Jio’s EBITDA was up 1.4% QoQ to Rs 142.6 billion, while Retail EBITDA rose 8% QoQ to Rs 62.7 billion.RIL’s profit after tax stood at Rs 19,641 crore in Q3FY24, down 1.2% QoQ and up 10.3% YoY and above market expectations of Rs 18,080 crore. PAT margin came at 8.7% versus 8.6% in the previous quarter.”We see this earnings report as a positive turning point to RIL’s investment cycle and expectations on energy profitability. RIL’s F3Q24 EBITDA (Rs405bn, down 0.7% QoQ) was a slight beat, 2% above our estimates, as better-than-expected gas production EBITDA more than negated the impact of fuel refinery maintenance,” Morgan Stanley said while giving a target price of Rs 2,821.

Analysts expect 2024 to be an eventful year for RIL as the past two years of investments move into the monetization phase. “We think investment cycles will be shorter than in the past two decades, with limited impact on balance sheet leverage,” the brokerage said, adding that a turn in the chemical cycle, a golden age for refining, traction in 5G subscribers and a slowdown in investments in retail could be among key events that garner investor traction.

Jefferies, which has forecast 12% Ebitda growth in FY25 with Jio contributing lion’s share on the back of a tariff hike, has a target price on Rs 3,140.

Sharekhan has maintained Buy rating on RIL saying that it is a compelling long term investment bet given strong prospects across business and potential value unlocking from retail, digital services, and financial services portfolio.

Citi, on the other hand, has downgraded RIL to neutral as the risk-to-reward ratio is fairly balanced.

“We raise our FY24-26E EBITDA by 2-5% led by Jio (higher tariff hikes), retail (recent robust performance), and O2C (3Q beat). The stock’s recent outperformance, however, makes risk/reward more balanced, in our view, and we downgrade to Neutral with a Rs 2910 target price,” Citi said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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