RIL shares can create up to $100 billion wealth, predicts Morgan Stanley
Morgan Stanley, a global brokerage firm, forecasted that Mukesh Ambani-led Reliance Industries' (RIL) fourth monetisation cycle could potentially increase market capitalisation by $60-100 billion. They set a target price of Rs 3,540 in the base case scenario.
Mukesh Ambani-led ' () fourth monetisation cycle can create a $60-100 billion increase in , global brokerage firm said, while giving a target price of Rs 3,540 in the base case scenario."Investments made in new energy, retail expansion to take market share from the unorganised sector, and repurposing of existing energy businesses provide a long runway to deliver consistently even beyond the next three years should ROCE be sustained above 10%. We estimate a 12% CAGR over F24-F27 with multiple triggers across verticals," Morgan Stanley's Mayank Maheshwari said.
The brokerage sees RIL’s ROE is higher than the cost of capital going forward as it is transitioning to a more profitable, sustainable, and less cyclical growth model due to changes in business as well as capital structure.
"We raise our multiples (in SOTP) by 0.5-1.0x to reflect this monetisation as RIL catches up with domestic and global peers that have seen the and monetisation re-rate multiples by ~30% in the past year," Morgan Stanley said.
By factoring in recent telecom tariff hikes, , and , the brokerage has raised its EPS estimates fractionally for 2025, by 7% for 2026, and by 8% for 2027.
"RIL has been a "show me" story for the past decade and has seen significant market cap inflection once new revenue streams such as new energy, higher telecom tariffs/chemical margins have been delivered," it said.
Following tariff hikes by Reliance Jio, RIL shares have rallied over 8% in the last week to fresh record highs.
Source: Stocks-Markets-Economic Times
