Reliance Industries (RIL), led by Mukesh Ambani, is poised for significant growth according to global brokerage firm Morgan Stanley. The firm believes that RIL‘s fourth monetisation cycle has the potential to increase its market capitalisation by $60-100 billion, with a base case target price of Rs 3,540 per share.
According to an ET report, the brokerage firm attributes this growth potential to RIL’s investments in new energy, retail expansion to capture market share from the unorganised sector, and the repurposing of existing energy businesses.
These factors are expected to provide a long runway for consistent earnings growth beyond the next three years, assuming a sustained ROCE above 10%. Morgan Stanley estimates a 12% EPS CAGR over F24-F27, with multiple triggers across various verticals.
According to Morgan Stanley, RIL’s ROE is expected to exceed its cost of capital in the future as the company transitions to a more profitable, sustainable, and less cyclical growth model. This transition is driven by changes in both business and capital structure.
Also Read | Reliance Industries market cap crosses Rs 21 lakh crore! Here’s what brokerages have to say about country’s most valued firm by m-cap
The brokerage has raised its multiples in the sum-of-the-parts (SOTP) valuation by 0.5-1.0x to reflect this monetisation, as RIL catches up with domestic and global peers that have experienced business upcycles and monetisation re-rating multiples by approximately 30% in the past year.
Taking into account recent telecom tariff hikes, oil prices, and refining margins, Morgan Stanley has slightly raised its EPS estimates for 2025, by 7% for 2026, and by 8% for 2027. The brokerage firm notes that “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.”
Following the recent tariff hikes by Reliance Jio, RIL shares have surged over 8% in the last week, reaching new record highs.
According to an ET report, the brokerage firm attributes this growth potential to RIL’s investments in new energy, retail expansion to capture market share from the unorganised sector, and the repurposing of existing energy businesses.
These factors are expected to provide a long runway for consistent earnings growth beyond the next three years, assuming a sustained ROCE above 10%. Morgan Stanley estimates a 12% EPS CAGR over F24-F27, with multiple triggers across various verticals.
According to Morgan Stanley, RIL’s ROE is expected to exceed its cost of capital in the future as the company transitions to a more profitable, sustainable, and less cyclical growth model. This transition is driven by changes in both business and capital structure.
Also Read | Reliance Industries market cap crosses Rs 21 lakh crore! Here’s what brokerages have to say about country’s most valued firm by m-cap
The brokerage has raised its multiples in the sum-of-the-parts (SOTP) valuation by 0.5-1.0x to reflect this monetisation, as RIL catches up with domestic and global peers that have experienced business upcycles and monetisation re-rating multiples by approximately 30% in the past year.
Taking into account recent telecom tariff hikes, oil prices, and refining margins, Morgan Stanley has slightly raised its EPS estimates for 2025, by 7% for 2026, and by 8% for 2027. The brokerage firm notes that “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.”
Following the recent tariff hikes by Reliance Jio, RIL shares have surged over 8% in the last week, reaching new record highs.
