Reliance Industries Share Price Reaction To $3Bn Deal With Samsung; RIL Rs 208 Away From 1-Yr High, Buy Or Not

The heavyweight stock, Reliance Industries, traded positively on March 17th after signing a mega deal worth $3 billion with South Korea's electronic giant Samsung. Reliance crossed Rs 1,400 mark in the opening bell and traded around the level. Amidst the Middle East conflict, oil and gas stocks are in the limelight and Reliance is no different. However, experts are optimistic on Reliance despite the impact the US-Israel-Iran war is bringing on global oil and gas supply.

Reliance Industries Share Price:

At the time of writing, Reliance traded at Rs 1399.40 apiece, up by Rs 4.35 or 0.31% with market cap of Rs 18,93,734.22 crore on BSE. During the opening bell, the stock touched an intraday high of Rs 1403.35 apiece, which brought Reliance closer to its 52-week high of Rs 1,611.20 apiece.

Reliance is between Rs 208 to Rs 210 away from reclaiming its 1-year high. And experts have already set a target that is higher than Rs 1,700 mark.

Reliance Industries -Samsung Deal:

As per the regulatory filing, Reliance Industries signed a long-term supply and purchase agreement (SPA) with Samsung C&T Corporation for the supply of green ammonia over a 15-year period. This implementation is expected to take place in second half of FY2029.

The SPA is valued over $3 billion, making it one of the largest binding long-term green ammonia off-take agreements in the world.

Anant Ambani, Executive Director, Reliance Industries Limited, said, "RIL's New Energy initiative aims not only to advance the energy transition but also to build a strong industrial platform for India by integrating India's renewable resources with the country's manufacturing leadership, world-class talent and innovation to produce value-added green fuels and chemicals at scale. At the heart of this vision is our commitment to indigenising the critical technologies of the energy transition - Solar, Battery Energy Storage Systems, and Electrolysers - under a strong Make-in-India framework."

He added, "Partnerships such as this will help scale our green hydrogen ecosystem and giga-factories, while contributing to India's ambition of becoming a global hub for green hydrogen and its while contributing to India's ambition of becoming a global hub for green hydrogen and its derivatives."

The agreement with Samsung C&T is the first in a series of long-term offtake partnerships supporting the scale-up of RIL's New Energy platform.

BUY Reliance Industries Share Price?

According to Motilal Oswal's report, amidst the blockade of Strait of Hormuz, 3.4mb/d of refining capacity disruption, China's restriction on refined product export and decade-high crude freight rates, Reliance is likely to benefit from the war.

The analysts at Motilal believes even if the tension eases soon, supply chain normalization may lag, keeping product cracks elevated and supporting Reliance's refining-petchem margins.

Further, they highlighted that during Russia's invasion of Ukraine, Reliance's consolidated EBITDA of O2C business surged by 18% YoY in FY23, and remained stable even in FY24 despite flat-to-slightly lower production meat for sale.

Hence, assuming gasoil/gasoline/jet fuel cracks sustain $15/5/15 per bbl above historical averages during 1HFY27, RIL's O2C EBITDA could increase by Rs 170 billion, implying 8.5% upside to its FY27 consolidated EBITDA.

Also, petrochemical spreads could expand as supply disruptions lift product prices, while RILs' diversified feedstock mix (only ~30% naphtha) limits crude-linked cost pressures. However, the re-introduction of export duties on fuels (similar to the Jul'22 SAED) could cap refining margins and limit the upside to O2C earnings.

Following this, Motilal analysts value Reliance's O2C/E&P segments at 7.5x/5.0x FY28E EV/EBITDA to arrive at an enterprise value of Rs 5.7t (or Rs 420 per share) for standalone business.

On the valuation, they added, "We ascribe an equity valuation of Rs 590/sh and Rs 560/sh to RIL's stake in JPL and RRVL, respectively. We assign Rs 174/sh to the New Energy business, Rs 30/share equity value to RCPL, and INR26/sh to RIL's stake in JioStar."

"We reiterate our BUY rating with a TP of Rs 1,750," they added.

Reliance Industries Corporate Actions:

Reliance Industries is among top dividend paying and bonus issuing stocks. Surprisingly, the stock has never carried a split.

Bonus Issue: Reliance's latest bonus reward was in October 2024 as a Diwali gift to its investors with a bonus share ratio of 1:1. But Reliance has delivered 1:1 bonus share each in September 2017 and November 2009 as well.

Dividends: So far, Reliance has delivered 25 dividends since May 2003, as per Trendlyne data. In the past 12 months, the company rewarded dividend of Rs 5.50 per share. Currently, it has a dividend yield of 0.4%.

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