Nuvama gives Reliance Industries highest Street target on solar push, stock up 2%

Reliance Industries | CMP Rs xx | shares rallied as much as 2 percent Domestic brokerage Nuvama Institutional Equities gave Reliance Industries Ltd (RIL) its highest target price on the Street, after reiterating its bullishness following the launch of RIL's solar modules. Reliance Industries announced the start of its first line of HJT (heterojunction solar panels) module manufacturing facility of 1GW, which can be scaled up in phases to fully integrated 10GW by early-CY26E.

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Domestic brokerage Nuvama Institutional Equities gave Reliance Industries Ltd (RIL) its highest target price on the Street, after reiterating its bullishness following the launch of RIL's solar modules.

The brokerage raised its target price on Reliance Industries to Rs 1,801 per share, reiterating its 'buy' call. At 12.50 p.m., shares of the conglomerate were quoting Rs 1,529, higher by 1.9 percent.

Reliance Industries announced the start of its first line of HJT (heterojunction solar panels) module manufacturing facility of 1GW, which can be scaled up in phases to fully integrated 10GW by early-CY26E.

According to the brokerage, its channel checks with key industry participants reveal that RIL has offered to sell its HJT modules in the lucrative domestic market since the rollout of its power generation business is some time away.

When compared to solar power players such as Waaree Energies or Premier Energies solar
module/cell capacity, RIL’s fully integrated solar equipment manufacturing facility could command a much higher EV.

This, in turn, could trigger a valuation re-rating for Reliance Industries, similar to the trend seen post-Jio’s launch in 2017. "RIL’s New Energy rollout shall not only add 50 percent-plus to PAT, but also rerate valuations, including the Oil to Chemicals (O2C) business given its net zero-carbon target by 2035," said Nuvama.

At 10GW capacity, the HJT module manufacturing facility could add Rs 3,800 crore to RIL's net profit, which would be around six percent of the firm's FY25 PAT.

At its AGM in August 2024, RIL had guided for a remarkable surge in the New Energy business with expectation of its profitability equalling O2C profitability in the next five–seven years. O2C is RIL’s largest profit base currently, contributing two–fifths of EBITDA and more than half of attributable PAT.

In addition to integrated solar facilities, RIL plans to set up a 30GWh battery facility. Green hydrogen and electrolyser manufacturing are on track with the company announcing a technology tie-up with Nel ASA.

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