bullish stock
Reliance Industries Limited (RIL), the country’s largest market cap company, is once again back on the path of growth after 6 months of challenges. The company has given better than expected results in the December quarter. Stock brokerage companies have said this. The group, which operates in sectors ranging from crude oil to telecom and retail, has recorded a record earnings before tax (EBITDA) of Rs 43,800 crore in the October-December quarter. These figures show that the Group has delivered strong performance across various business areas. Primarily the company has performed well in the oil-to-chemicals (O2C) sector. Apart from this, the consumer retail business of the company has also improved. Reliance is back on growth track after six months of challenges, Morgan Stanley said in a note. Its effect may be visible on the company’s stock in the coming days. The stock was declining for the last several months. The stock had fallen by about 25 percent but now it is expected to pick up momentum once again. These stocks are best for those investors who want to take less risk by investing money in the market. This stock is low bought. Therefore there is no big fluctuation in it.
Group preparing for expansion in these sectors
The company intends to expand its chemicals capacity focused on the domestic market with investments in the vinyl/polyester line and ethane import logistics. Morgan Stanley said demand for chemicals in India remains strong, growing at five to 16 percent annually. HSBC Global Research said it sees several catalysts to drive the group’s business forward in 2025. This includes changes in retail, the introduction of new energy and new momentum in digital business. That said, we believe third quarter results were in line with expectations. This is the latest in a string of slightly below-expected near-term results. We now believe that changes in the retail sector, the launch of new energy businesses and the acceleration of digital business will prove to be catalysts for the group.
Company’s ARPU will increase
HSBC believes that the company will complete the optimization of its portfolio and products for the retail sector and return to growth. The company will move into the business of instant grocery delivery through its hyperlocal model. Talking about new energy business, Reliance is expected to start module production and cell business. The company will also commission five to 10 gigawatts of solar capacity for its own use, increase production of sodium ion cells and announce hydrogen manufacturing. HSBC said that on the digital front, increasing penetration of airfibre-based broadband will increase the company’s average earnings per customer (ARPU). The full impact of the fee increase will be visible by June 2025.
These three factors will drive growth
Nomura said three things will drive Reliance’s growth in the near term. This includes the new energy business starting in March 2025, tariff increase for Jio and a possible initial public offering (IPO) and listing of Jio itself. Nuwama Institutional Equities said Reliance will be among the top 10 producers in the world after the petrochemical expansion. According to Bernstein, the good performance of Jio, retail and exploration and production sectors has contributed to the better results of Reliance Group in the third quarter.
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