RIL: Antique, Systematic Institutional Equities place stock on 'Buy' list

Over the past year, RIL's stock price has hovered in the range of Rs 2,300 to Rs 2,800

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26 Aug, 2025 12:21

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Brokerage firm Antique Stock Broking and Systematic Institutional Equities have initiated coverage on Reliance Industries Ltd (RIL) with a buy rating and increased the target price from its current market price.

Antique Stock Broking has initiated coverage with a buy rating and a target share price of Rs 2,900 on the RIL. Systematic Institutional Equities too, has rated the stock as a buy, but with a slightly lower target share price of Rs 2,825.

Antique says RIL is poised for strong earnings growth in multiple sectors over the next two years, and is well-positioned to capitalise on a major value-creating opportunity in the new energy business. The company's oil-to-chemicals or O2C sector is expected to benefit from a "platinum age of refining," while its telecom business is positioned to capitalise on the transition to 5G with a significant tailwind from tariff increases.

Additionally, RIL's retail segment is expected to see robust growth because of aggressive investments made thus far, while the company's oil and gas segment is expected to benefit from increased gas production, driving earnings growth.

“We expect Reliance Retail Ventures' (RRVL) revenue/ EBITDA to grow at 26 percent CAGR over FY23-25E, with core retail revenue/ EBITDA growing at 31 percent / 32 percent over the same period. For the O2C business, we expect a sharp EBITDA growth of 30 percent in FY24, likely to decline by 6 percent in FY25, given that Russian crude discount could fall sharply in FY25,” Antique said in its note to investors.

“For telecom, we expect pending tariff revision to be taken up soon, which, along with higher 5G data consumption, is set to drive ARPU, while rollout of high ARPU fibre to the home (FTTH)/ Fixed Wireless Access (FWA) adds a large revenue stream. These collectively will drive EBITDA growth of 24 percent and 20 percent over FY24 and FY25, respectively. We expect 20 percent tariff revision, resulting in a small 3 percent SIM consolidation,” the Antique report added.

Systematic Institutional Equities says its forecast for FY23E-FY25E shows a modest compounded annual growth rate (CAGR) of 13 percent in EBITDA, largely driven by retail and Jio. The consumer business will continue to experience robust EBITDA growth of 22 percent, primarily due to a 23 percent growth in telecom and 19 percent in retail during this period.

The brokerage firm anticipates that strong petrochemical margins will more than offset lower gross refining margins (GRM), resulting in a projected 3 percent CAGR in the O2C EBITDA. While the upstream business may benefit from a 58 percent increase in volumes from FY24E onwards, lower realisations could limit EBITDA growth in this business to 7 percent, the Systematic Institutional Equities report said.

Meanwhile, the brokerage firm sees a possibility of a significant surge in net debt, rising to Rs 1.8 trillion in FY25E from Rs 1.2 trillion in FY22, due to increased capital expenditure in various sectors such as petrochemicals, 5G, organised retail, energy transition, and new energy businesses.

Over the past year, RIL's stock price has hovered in the range of Rs 2,300 to Rs 2,800, underperforming the Nifty by 3.8 percent. However, RIL's option value could potentially increase as the company's new energy business nears commencement. Some of the key upside triggers that could positively impact the stock price include a hike in mobile tariffs, the listing of retail and Jio, and the monetisation of O2C and RIL Syngas, Systematic Institutional Equities added.

RIL has revealed an ambitious plan to invest heavily in the development of solar energy and giga factories for energy storage, fuel cell systems, green hydrogen, and power electronics, with the aim of achieving 100 GW of vertically integrated solar energy. The company plans to invest Rs 750 billion in this initiative, which will cover approximately 30 GW of integrated solar plants.

"We anticipate that RIL will make additional investment announcements in the future. With the benefit of an attractive 20 percent PLI and tariff protection of 40 percent, combined with RIL's critical technology acquisitions and cost competitiveness, the solar energy sector is poised to deliver a minimum of 20 percent EBITDA margin and 20 percent IRR,” the Antique report said.