RIL Receives Highest Target Cover At 30% Upside; O2C Biz Considered ‘Cash Cow’

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RIL Receives Highest Target Cover At 30% Upside; O2C Biz Considered ‘Cash Cow’
Credit: © Reuters.

By Malvika Gurung

Investing.com -- The oil-to-telecom conglomerate Reliance Industries (NS: RELI ) has received its most enthusiastic target of all the analysts covering the stock. 

Bernstein has maintained an outperform rating on the bluechip and raised its target from Rs 2830 to Rs 3,360/share. Currently trading at Rs 2,592 apiece, the set target price is at an upside of 29.6%.

The brokerage sees strength across all RIL segments and expects the earnings growth potential to be higher than the consensus estimates, and marks the giant’s oil refining business as the biggest revenue generator, or cash cow.

Bernstein expects Mukesh Ambani’s business EPS on the basis of FY23 at Rs 154, 29% above the consensus estimates and projects its O2C business to deliver a record EBITDA of Rs 84,500 crore, which is 25% above the consensus estimates.

The biggest tailwind for RIL’s stock in the near term will be the rising refining margins, which the brokerage sees surging for the company, to record levels of $25.5/barrel in FY23 from $9.8/barrel in FY22.

Further, RIL has been a major beneficiary of cheaper Russian crude but it may not be sustainable going forward due to increased scrutiny.

Besides, Reliance Jio is set to deliver strong results due to tariff hikes, and more of them are expected, thanks to a stable industry structure and government reforms, stated the brokerage.

The growth outlook of Reliance Retail too has improved as Covid-19 restrictions have eased and the economy has opened up, along with strong store additions.

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  • Krishna Kumar @Krishna Kumar
    So dont buy reliance! It may go up 2100!?😄
    Like 1
    • Girish Kundwani @Girish Kundwani
      @Krishna Kumar Buy Double quantity at 2100
      Like 1
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