Reliance Industries, the company owned by India’s richest man, Mukesh Ambani, surpassed the Rs 20 lakh crore market cap on Tuesday, setting a new record high for the company as its share price skyrocketed. However, there’s still more to speed up because Reliance’s next expansion wave is about to arrive! Having said that, the massive product’s next target price is anticipated to be higher than Rs 3,100.
Reliance’s share price increased by as much as 1.89% during the trading session on February 13 to reach an all-time high of Rs 2,957.80 per share, marking the first time that the company’s market capitalization exceeded Rs 20 lakh crore. With a market capitalization of more than Rs 19.81 lakh crore, the stock closed at Rs 2,928.95 per share on the BSE, up 0.90%.
Over the last two weeks, Reliance has grown significantly, gaining more than Rs 1 lakh crore in market capitalization. The m-cap of Reliance reached Rs 29 lakh crore on January 29. It took close to 20 years to create this amazing history.
It took almost two years for the trillion-dollar RIL to surpass the Rs 2 lakh crore market capitalization. This was first accomplished in August 2005. 2007 proved to be a very successful year for the company, as it reached a market capitalization of Rs. 2 lakh crore in April, Rs. 3 lakh crore in September, and Rs. 4 lakh crore in October. But there was a period of almost ten years of dullness after that. Reliance’s m-cap reached Rs 5 lakh crore in July 2017 after nearly 12 years, and in November 2019, the valuation doubled to Rs 10 lakh crore.
However, Reliance has generally benefited more from the pandemic era than it has suffered. Reliance was on a meteoric rise thanks to back-to-back acquisitions from international investors, a 5G network, strong growth in the telecom and retail sectors, corporate reorganization, and a goal to become the world’s top provider of new materials and energy. The conglomerate’s market capitalization (m-cap) reached Rs 15 lakh crore in September 2021, Rs 19 lakh crore on January 29, 2024, and the Rs 20 lakh crore milestone was reached in just two weeks.
Reliance’s shares have gained 13% so far this year, and on the BSE, its gains over the last six months have been roughly 14%. The share price of Reliance has increased by at least 33.5% in a year. Reliance has a multi-bagger title in a span of five years, with an upside of almost 158% at this point. However, since mid-July 1995, the all-time gains have been an astounding 12,843%.
As Reliance correctly states, “Growth Is Life”!
What’s Reliance’s next step?
The BOBCAPS said in its most recent research note, “We adjust our FY24-FY26 EBITDA estimates, factoring in a 14% CAGR over FY23-FY26, driven by a 26% CAGR in profits from consumer businesses. After reduction of our fair value to Jan’25 (from Oct’24) and addition of Rs 35/sh as the value for RIL’s media business (from nil earlier), our SOTP-based TP increases to Rs 3,175 (from Rs 3,015). Brokerage analysts continued in the note, “We maintain target multiples across the refining (7x FY26E EV/EBITDA), petrochem (8x), telecom (Jio: 9x), and retail (32x) businesses. Values for the upstream business are Rs 187/sh (from Rs 161), digital services are Rs 112 (Rs 107), and new energy is Rs 181 (Rs 171). GET IT.”
The brokerage lists the following as the main stock catalysts: (a) Jio: Clearly showing a trend of increasing market share and ARPU while utilizing 5G; (b) Retail: RIL’s comfort level in disclosing performance information for major retail verticals and acceleration towards the 3x growth target over 3-5 years set at the FY21 AGM; (c) O2C: Advice on cost reduction through the deployment of new energy; (d) Media: Advancements in growing the business; (e) Public offers: Jio and retail businesses are listed.
That’s why the brokerage added, “RIL’s consumer businesses remain key beneficiaries of India’s growth story; maintain BUY with a higher TP of Rs 3,175 (from Rs 3,015).”
