Reliance Share: RIL At Record High, Becomes India's 1st To Cross Rs 20 Lakh Cr M-Cap; Next Target At Rs 3,175

'Growth Is Life' is Reliance Industries' biggest motto. And Reliance continues to grow like never before. On Tuesday, India's richest man Mukesh Ambani's Reliance Industries became the country's first company to surpass Rs 20 lakh crore market cap as its share price flew across the roof to hit a new all-time high. But there's more to accelerate because Reliance's next wave of growth is in the offing! That being said, the next target price is expected to be above Rs 3,100 for the behemoth.

Reliance Share Price:

In the trading session of February 13, Reliance's share price surged by as much as 1.89% to hit an all-time high of Rs 2,957.80 apiece, taking its market capitalisation to over Rs 20 lakh crore for the first time. The stock ended at Rs 2,928.95 apiece, up by 0.90% on BSE with m-cap of over Rs 19.81 lakh crore.

Reliance has made tremendous growth in the past two weeks, gaining over Rs 1 lakh crore m-cap alone in this period. Reliance touched Rs 29 lakh crore m-cap on January 29. The journey to create this breathtaking history took nearly 20 years.

The trillion dollars worth RIL first crossed Rs 1 lakh crore market cap in August 2005, while it took nearly two years to touch over Rs 2 lakh crore m-cap.

The year 2007 was very fruitful for the company as it touched m-cap of Rs 2 lakh crore m-cap in April 2007, while the Rs 3 lakh crore m-cap came in sweetly in September 2007and further Rs 4 lakh crore strolled in October 2007. But after that, there was nearly a decade of dull period. It took Reliance about 12 years to touch Rs 5 lakh crore m-cap in July 2017, but the valuation doubled to Rs 10 lakh crore in November 2019.

The pandemic era however has been broadly a boon to Reliance than a curse. With back-to-back deals from global investors, a 5G network, robust growth in telecom and retail business, restructuring of the business, and a vision to build the world's leading New Energy and New Materials company, Reliance was on a sky-high root.

The conglomerate first touched Rs 15 lakh crore m-cap in September 2021, followed by Rs 19 lakh crore m-cap on January 29, 2024, and in two weeks, the company has crossed the Rs 20 lakh crore milestone.

Year-to-date, Reliance shares are up by 13%, while its six-monthly gains are around 14% on BSE. In a year, Reliance shares have zoomed by 33.5% at least. In 5 years span, Reliance has a multi-bagger title with an upside of nearly 158% as of now. But the all-time gains are eye-bulgingly 12,843% since mid-July-1995.

'Growth Is Life', as Reliance rightly says!

So what is the next level of Reliance?

In its latest research note, BOBCAPS said, "We tweak our FY24-FY26 EBITDA estimates where we bake in a 14% CAGR over FY23-FY26 led by a 26% CAGR in consumer business profits. Our SOTP-based TP rises to Rs 3,175 (from Rs 3,015) upon discounting our fair value back to Jan'25 (from Oct'24) and adding in Rs 35/sh as the value for RIL's media business from nil earlier."

Analysts of the brokerage in the note added, "We maintain target multiples across the refining (7x FY26E EV/EBITDA), petrochem (8x), telecom (Jio: 9x) and retail (32x) businesses and include values of Rs 187/sh (from Rs 161) for the upstream business, Rs 112 (Rs 107) for digital services, and Rs 181 (Rs 171) for new energy. BUY."

The key stock catalysts as per the brokerage are -- (a) Jio: Clear trend in market share gains and an increase in ARPU, leveraging 5G; (b) Retail: Acceleration towards the 3x growth target over 3-5 years set at the FY21 AGM and demonstration of RIL's comfort in sharing performance details for major retail verticals; (c) O2C: Guidance on cost reduction with the deployment of new energy; (d) Media: Progress on scaling up the business; (e) Public offers: Listing of the Jio and retail businesses.

Hence, the brokerage's note added, "Maintain BUY with a higher TP of Rs 3,175 (from Rs 3,015); RIL's consumer businesses remain key beneficiaries of India's growth story."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.