India's clean energy sector, which is expected to grow to $200-billion market and see cumulative spending of $2 trillion by 2050, is the next key trigger for Reliance Industries' stock, financial services firm Bernstein has said.
"We believe the clean-energy business to be worth Rs 200 a share today but with plenty of scope for expansion over time," Bernstein said in a June 9 report. The value is nearly 8 percent of the company's current market price of around Rs 2,500 a share.
It expects RIL to potentially achieve $10 billion of revenue from the new energy business in 2030, which represents 40 percent of the TAM (total addressable market).
By 2030, RIL could capture 60 percent, 30 percent and 20 percent of solar, battery and hydrogen TAM respectively, it added.
Follow our live blog for all the market action
Based on how RIL executes its plans, the new energy business could be valued at Rs 1,200-2,200 a share or more than 10x of the current valuation by 2050, Bernstein's Neil Beveridge and Rahul Malhotra said.
Reliance Industries' oil-to-chemicals (O2C) business continues to benefit from low-cost Russian crude feedstock.
Russian Urals oil is trading at a 20-25 percent discount to Dubai oil, providing an additional $6-8 per barrel spread on refining margins.
On the back of this, Bernstein estimates that the O2C business can achieve an FY24 EBITDA of Rs 63,000 crore.
The Street is confident of Reliance Industries' funding capabilities, given its strong balance sheet and positive outlook for free cash flow. The company plans to maintain a net debt-to-EBITDA ratio of less than 1x (0.6x in FY23).
Bernstein has assigned an "outperform" rating to RIL, with a price target of Rs 3,040, representing approximately 22 percent upside potential.
At 1.30 pm, the stock was quoting at Rs 2,513.15 on the NSE, up 1.15 percent from the previous close.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
