Reliance AGM: New Energy Planes, Jio Listing a Dampener

The 47th AGM of RIL (Reliance Industries Limited) clearly stated that the company is morphing into a deep-tech and new-age manufacturing entity.

Photo Credit: News18

Analysts were enthused by the road map for its new energy business, even as they said a lack of monetization plans at Reliance Jio Infocomm and Reliance Retail Ventures Ltd was disappointing.

Key Takeaways from the AGM:

New Energy Focus: RIL has reaffirmed its commitment to the New energy business and seeking this segment as profitable like O2C over the next 5-7 years.

Giga-Factories and Green Initiatives: The company announced the groundbreaking setting up of giga-factories and will also invest in renewable projects including Solar Power Generation — And green hydrogen production.

AI Integration: Jio is the leading adopter of AI with AI virtually embedded in every bit of operation RIL performs.

Financial Targets: RIL has maintained its goal of doubling in the next 7 years up to 2027 and doubling the EBITDA for both Retail & Jio between FY24-FY28.

Analyst Views and Target Prices:

Emkay Global: Retained 'buy' call on RIL with a target price of Rs 3,335. Jio And Retail: While Emkay was surprised by the fact there were no monetization plans announced for Jio and Retail, it expects new energy to contribute earnings from FY28 onwards.

Nuvama: Rs 3,786 target with very strong core upside potential as new energy gains traction.

Antique Stock Broking: Held a "Hold" rating with a target of Rs 3,213 as it believes most of the visible growth for RIL is already discounted.

MOFSL: suggested 'Buy' with a target price of Rs 3,435 in hopes that BPCL (a) up the refining margin in Sept-20 and b) increase telecom tariff.

Finally — Reliance's shift towards new energy and technology end of the story. While the lack of clarity on monetization for both Jio and Retail was a mitigating factor, we believe this is an attractive risk-reward for investors given a combined per-share value estimate (ex-new energy business) of over Rs 2,000 on account of strong fundamentals.

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