While there are growing concerns that a telecom tariff hike could happen only after the general elections in May 2024, global brokerage Jefferies said it could lead to a market share grab and in theory create an effective monopoly that would add could 93 per share upside potential.
“While we cut Reliance Jio estimates by 1-6% for delay in tariff hike, we reiterate Buy rating as Reliance Industries Limited (RIL) offers 36% upside to our revised target price. 3,060 and 28% upside even if the tariff hike does not materialize till March 2025,” the note said.
“Following our recent note addressing key investor concerns on RIL, which addressed key concerns on capex, leverage and slowing growth in retail, we look at key investor concerns on RIL’s telecom operations in this note. In our recent conversations, the delay in the timing of the tariff hike – potentially after the general election in May-24, has been cited as a major concern on Reliance Jio, apart from increased capex and leverage,” Jefferies he said.
Reliance Industries shares are trading close to 52-week low 2,180 a piece that hit the BSE earlier this week. The stock is down more than 13% so far in 2023 (year-to-date or YTD).
In CY23, global brokerages continue to see JPMorgan Reliance Industries Ltd. (RIL) as a relative outperformer in what could be a sluggish overall earnings environment, but several potential catalysts for absolute outperformance in CY24-25 See help to do.
“We see continued strength in the refining business, a potential rebound in petrochem spreads from decade lows fueled by the reopening of China, and volume growth in E&P – driving earnings growth. RIL continues to offer multiple growth options across businesses (petrochem, E&P, telecom, retail, financial services, new energy) and ongoing investments should drive the next phase of growth,” JPM said in a note last week. Said.
The views and recommendations given above are those of individual analysts or broking companies and not of o2help.in.
