RIL stock not done yet, long runway ahead, say analysts

Mumbai: Shares of Reliance Industries (RIL), India’s most valued company, have seen a dream run at a time when Covid-19 pandemic has impacted investor sentiment across the world. Investors are rewarding the oil-to-telecom conglomerate after the company fulfilled its promise to be net debt free well ahead of the deadline.

Mukesh Ambani-led RIL saw its market-cap swell past the $150 billion mark on Friday, the first for an Indian company, as the behemoth clinched a series of marquee investments for its unit Jio Platforms, besides successfully completing the country’s biggest ever rights issue.

RIL raised more than Rs 168,818 crore in just 58 days, out of which Rs 115,693.95 crore was collected from Jio investors and another Rs 53,124.20 crore through the rights issue. Along with the stake sale to BP in the petro-retail JV, the total fund raised has exceeded Rs 1.75 lakh crore.


The RIL stock currently has 17 'strong buy', 8 'buy', 3 'hold', 3 'sell' and one 'strong sell' ratings, data from Reuters Eikon showed.

Analysts believe there is more steam in the stock and it is up for another dream run .
“The stock has had a dream run since its March lows. From shareholders' perspective, I will not be surprised if the stock doubles in next three years,” said Ajay Bodke, CEO-PMS Prabhudas Lilladher.

“Rarely in the history of Indian capital markets, or even global markets, has one seen a string of such marquee names investing upwards of Rs 1 lakh crore in an entity. Jio has the potential to transform the consumer impulses and habits of one-sixth of humanity,” Bodke said, adding that the consumer-focused businesses – retail and telecom -- will be at the forefront of this transformation.

Deven Choksey, Group Managing Director, KR Choksey Investment Managers, likened the potential of Jio Platforms to what behemoths such as Google, Apple, Microsoft and Amazon have achieved. “Reliance Jio holds a similar promise. They have created a complete framework for a significantly large amount of business prospects, covering several verticals like retail, healthcare, payments gaming and education, media and entertainment,” Choksey said.

“Eventually, this will reflect in the large plan of the business. I will not be surprised to see Jio Platforms commanding a $200 billion valuation in 2-5 years,” he said.

The optimism was widespread.

“The stock has a huge pathway ahead and in that way it is 15% of the market right now. Lots and lots of funds will have to be buying this stock and that should propel the market,” said Ayon Mukhopadhyay, director at institutional equities at IIFL Securities. He said there is also speculation as to whether the stock will be split. He believes the conglomerte will be split and list as different companies and that itself will bring more investors to the company.

“I would definitely say that the runway to growth is still not done, and there is a clear pathway right now,” he added.