Highest Dividend In 7 Yrs: Rs 10 Dividend On Rs 2,977 Stock, Reliance Turned Ex-Dividend; BUY For Rs 3,585 TP

India's largest billionaire Mukesh Ambani owns the country's largest company in terms of market share, Reliance Industries (RIL) who turned ex-dividend on August 19, 2024, during the occasion of Raksha Bandhan. Reliance will distribute its highest dividend payout of Rs 10 per share in seven years. Eligible shareholders are determined by the end of the record date. There is more room to buy in Reliance stock as its highest target price is set at Rs 3,585 per share.

Reliance Industries' share price turned ex-dividend on August 19, which was also its record date to determine eligible shareholders. Meaning, that only those investors will be eligible who are holding Reliance shares by the end of August 19, and any buyers after this date will not qualify.

After market hours on Monday, Reliance stock ended at Rs 2977.20 apiece, which was up by 0.71% on BSE. The company's market cap is at Rs 20,14,318.45 crore, making it the country's largest company.

At the current market price, Reliance has a dividend yield of 0.34%. The company will pay Rs 10 per share dividend which is final for FY24, higher compared to dividends of Rs 9 per share and Rs 8 per share in FY23 and FY22.

This is also Reliance's highest dividend in 7 years. The last time Reliance delivered a double-digit dividend was in April 2017 worth Rs 11 per share or 110%.

YTD, Reliance stock has gained by nearly 15%. While its all-time gain is about 13,055.99% on BSE.

BUY Reliance Shares:

BOB Capital Markets highlighted the following key pointers from Reliance's annual report for FY24:

1. Reliance Retail: ~3.5% market share: RIL retail has captured 3.5% market share
of the Indian Retail market and aims to grow at more than double the rate (>20%) of market growth of 10% CAGR over 2023-27E indicated by RIL.

2. Digital Services positioned to lead FWAs: Leveraging standalone 5G
architecture, Jio aims to lead the market on fixed wireless access (FWA) and targets
100mn premises. Jio has already scaled up Jio AirFiber offerings across 5,900 towns.

3. New Energy offers a much wider canvas: RIL sees New Energy as ambitious,
transformational, and more global in scope than anything it has ever done before. RIL targets the first train of 20GW solar PV (photovoltaic) manufacturing by the end of 2024 and scale up to 20GW in a phased manner over 2026. It targets
industrialising sodium-ion cell production at the MW level in 2025 and the first
50MWh/year lithium battery cells pilot in 2026.

4. M&E: Growing scale and ambitions: Targeting to capitalise on 1bn connected
screens by 2030, advertising for SMBs on digital media, and experiential viewing.

5. O2C and O&G: While Oil to Chemicals (O2C) is planning to focus on leveraging
external changes, Oil & Gas (O&G) is likely to focus on leveraging existing
infrastructure. We infer this as lower investments in these businesses near term.

6. Succession pointers: RIL has widened the scope of professional leadership across businesses and is grooming the next generation of family for leadership roles.

Taking into the above consideration, on the valuation, BOBCAP said, ": We have an SOTP-based TP of Rs 3,585 with target multiples for Refining (7.5x), Petrochemicals (8.5x), Jio Infocomm (11x) and Retail (34x). Refer to Structural position to tide over near-term hiccups, published on 20 July, for details on our forecasts and valuation."

This hints at a potential upside of more than 20% in Reliance ahead.

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.