Reliance Industries share selling is 'overdone', says Goldman Sachs, sees 27% upside

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HomeMarket NewsReliance Industries share selling is 'overdone', says Goldman Sachs, sees 27% upside

Key downside risks for Reliance Industries include a lower-than-expected refining and chemical margins, lower-than-expected Average Revenue Per User (ARPU), lower-than-expected market share and margins in the retail business, project delays and higher future capex.

Profile imageBy Hormaz Fatakia   January 10, 2025, 9:10:43 AM IST (Updated)

Reliance Industries share selling is 'overdone', says Goldman Sachs, sees 27% upside

Brokerage firm Goldman Sachs believes that the selling seen in shares of Reliance Industries Ltd. is "overdone" and that the share price is now near their "bear case" scenario.

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The brokerage maintained its "buy" rating on Reliance Industries, with a price target of ₹1,595, implying a potential upside of 26% from Thursday's closing levels. Goldman Sachs had an earlier price target of ₹1,630 on Reliance Industries.

This is the fourth brokerage note on Reliance Industries during the course of this week. Earlier, Bernstein and Jefferies had reiterated their bullish call on the Nifty 50 heavyweight, citing attractive valuations.

Goldman Sachs expects Reliance Industries' Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to grow by 24% on a year-on-year basis in financial year 2026.

The brokerage said that their bullish view is based on a potential rebound in refining margins, another telecom tariff hike in financial year 2026, return of the retail business to growth, and potential start of the new energy giga complex.

However, the brokerage has revised its financial year 2025, 2026 and 2027 EBITDA estimates lower by 2.8%, 4.1% and 3.9% to reflect mark-to-market of refining cracks, delay in completion of petchem capacity expansion, lower telecom subscriber additions and cut in the EBITDA of its retail business.

Key downside risks for Reliance Industries include a lower-than-expected refining and chemical margins, lower-than-expected Average Revenue Per User (ARPU), lower-than-expected market share and margins in the retail business, project delays and higher future capex.

Out of the 39 analysts that have coverage on Reliance Industries, 33 of them have a "buy" rating, while three each have a "hold" and "sell" rating.

Reliance Industries will be declaring its September quarter results next Thursday, January 16.

Shares of Reliance Industries had ended 0.7% lower on Thursday at ₹1,256.8.

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First Published: 

Jan 10, 2025 9:03 AM

IST

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