Bernstein raises Reliance Industries target price to ₹1,640, citing 3-year low valuation

Time of India

2 days ago

Seeing a 3-year low valuation in
Reliance Industries
Ltd (RIL) shares, global brokerage firm
Bernstein
has raised its target price on the stock to ₹1,640, implying a potential upside of 15.4% from the stock's previous close, while maintaining an 'outperform' rating on the same.
It should also be noted that Bernstein's target price on the stock is even higher than the latter's 52-week high of ₹1,608.95 on the BSE.
The revision in the target price comes on the back of the brokerage firm citing strengthening growth momentum, an improving earnings outlook, coupled with supportive valuations.
Bernstein noted that Reliance is nearing the end of a major store rationalization cycle in its retail segment, which involved the closure of over 2,100 underperforming stores in FY2025. With that process largely complete, the brokerage expects a shift from aggressive expansion to steady revenue and EBITDA growth. Bernstein has projected a compound annual growth rate (CAGR) of 16% and 20% for revenue and EBITDA, respectively, over FY2025–27 in the retail segment.
On the telecom front, continued tariff repair is expected to support earnings growth. Bernstein forecasts 13% CAGR in revenue for Jio over the next two years, supported by rising ARPU (average revenue per user) and further rollout of Jio AirFiber. The brokerage anticipates subscriber additions and growing broadband adoption to drive further gains, with Jio expected to reach a subscriber base of 500 million and a market share of 48% by FY27.
In the new energy segment, Reliance's ventures in solar, battery, electrolyzers, and fuel cells are gaining traction. The company has commenced operations with a 1GW production line and aims to reach 10GW capacity by 2026. Bernstein highlighted this segment as a long-term growth pillar, supported by the company's planned investment of US$2 trillion through 2050.'
Bernstein also underlined Reliance's disciplined approach to capital allocation, with capital expenditure moderating and the net debt to EBITDA ratio remaining flat in FY2025. At a current 10.1x one-year forward EV/EBITDA multiple, the stock trades at a 15% discount to its three-year average valuation, making the risk-reward ratio attractive, the brokerage said.
Around 12:40 pm today, the shares of
Reliance Industries
were trading 0.89% lower at ₹1,408.10 on the BSE.