Research firm UBS has upgraded the rating of Reliance Industries Limited. Earlier it was ‘neutral’, now it is given ‘buy’ rating. UBS believes that the growth prospects for RIL are increasing.
Reliance Industries (Indicative Image)
Mukesh Ambani’s Reliance Industries Limited (RIL) has been upgraded from its earlier ‘neutral’ tag to ‘buy’ rating by global brokerage and research firm UBS. In a report, analysts at UBS said RIL is heading towards growth in all three sectors- energy, consumer retail and Jio. So far this month, the share price of RIL is currently trading at around Rs 2,050 per share.
UBS believes that improving energy demand, ramp-up of digital platforms, reopening of new stores and launch of JioPhone Next will boost the growth prospects for RIL. UBS has given a target price of Rs 2,500 for the company’s stock.
With recovery in refining margins, Reliance’s oil-to-chemicals business is also expected to pick up in the period till FY2024. The company may further its strategic partnership with Saudi Aramco in the current financial year. This will help in investing $10 billion in Reliance’s New Energy. However, information about the valuation and terms of this deal has not been given yet.
UBS believes that the launch of Jio Phone Next and bundled plans with affordable tariffs can boost the company’s telecom business. Jio’s Average Revenue Per User (ARPU) is expected to grow 8-10 percent on a year-on-year basis.
Mukesh Ambani is engaged in making new plans to strengthen his hold in the retail business. According to sources, Reliance may soon buy Just Dial. Talks are going on for this. The deal is expected to be between $80-900 million.
Reliance’s stock is trading at Rs 2,050 per share, down about 2.8 percent this month. The stock has underperformed this year in comparison to the benchmark Nifty 50.
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