Citi Rockets Reliance Industries Price Target to ₹1,805! 17% Upside Ahead? Investors Buzzing!

Analyst Upgrade Fuels Reliance Rally

Global brokerage firm Citi has issued a strong positive note on Reliance Industries Ltd (RIL), raising its price target and reiterating a 'Buy' rating. The brokerage's latest assessment suggests significant upside potential for the Nifty 50 heavyweight, signaling continued investor confidence in the conglomerate's multifaceted growth strategy.

Citi's Bullish Stance on Reliance Industries

Citi analysts have updated their outlook on Reliance Industries, lifting the price target to ₹1,805 per share. This represents a potential upside of approximately 17% from the stock's previous closing price. The firm has maintained its 'Buy' recommendation, underscoring its conviction in RIL's future performance.

• Citi revised its FY27E EV/EBITDA multiple for Jio Platforms, aligning it with Bharti Airtel's by increasing it from 13x to 14x.
• This revision has led to an increase in Jio's estimated enterprise value from $135 billion to $145 billion.
• For the first time, Citi has explicitly included Reliance Consumer Products Ltd. (RCPL) in its valuation, assigning a value of ₹63 per share to the business following its demerger from Reliance Retail Ventures Ltd. (RRVL).
• Citi reaffirmed Reliance Industries as its top pick within the Indian oil and gas sector.

Brokerage Consensus Remains Strong

Citi's positive assessment aligns with other leading financial institutions. Last week, Jefferies reiterated its 'Buy' rating on Reliance Industries, setting a price target of ₹1,785 per share. JPMorgan also maintained its 'Overweight' rating, increasing its price target to ₹1,727 from a previous ₹1,695.

Reliance Industries: A Growth Powerhouse

The positive sentiment is underpinned by the performance of RIL's core business segments. According to foreign brokerages, all three major verticals of Reliance Industries—digital services (Jio), energy, and retail—have demonstrated robust double-digit growth in the current financial year.

Valuation and Peer Comparison

Despite a significant 27% rise in its shares year-to-date, outperforming the Nifty 50's 10% gain, analysts believe Reliance Industries offers attractive valuations. JPMorgan highlighted that RIL's stock is trading at a discount of approximately 15% compared to its peers, such as Avenue Supermarts in the retail segment and Bharti Airtel in the telecom sector.

Stock Performance Snapshot

Reliance Industries shares closed Tuesday's session at ₹1,548.30, marking a 1.14% decrease. The stock is currently trading close to its recent high of ₹1,581.30, indicating sustained investor interest.

Analyst Sentiment

Overall analyst sentiment towards Reliance Industries remains overwhelmingly positive. Out of the 37 analysts covering the stock, a significant majority of 35 recommend a 'Buy', with only two maintaining a 'Sell' rating. The consensus price targets suggest an approximate 9% upside from current trading levels.

Impact

• This news is likely to positively influence Reliance Industries' stock price, potentially driving it towards the new target price set by Citi and other brokerages.
• It could also boost overall market sentiment, especially for large-cap stocks and the diversified conglomerate sector.
• Investors holding RIL shares may see increased value, while potential investors might view it as an opportune time to enter or increase their positions.
• Impact rating: 8

Difficult Terms Explained

• EV/EBITDA: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. A financial ratio used to assess a company's valuation relative to its operational profitability.
• Enterprise Value (EV): A measure of a company's total value, often used as an alternative to market capitalization. It includes the market value of equity, debt, and minority interest, minus cash and cash equivalents.
• Demerger: The separation of a company into two or more independent entities. This often involves spinning off a division or subsidiary.
• Holding Company Discount: The valuation discount applied to a holding company compared to the sum of the market values of its individual subsidiaries. This reflects complexities or inefficiencies in managing multiple entities under one umbrella.
• Nifty 50: A benchmark stock market index in India that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange.