Morgan Stanley has reiterated its Overweight rating on Reliance Industries Limited (RIL) with a target price of Rs 3,325, indicating a potential upside of 21% from the current market price of Rs 2,745.50. The brokerage reported that RIL’s second-quarter EBITDA missed estimates due to weak domestic demand, though profits exceeded expectations, driven by lower depreciation.
Morgan Stanley highlighted that the company’s capex intensity and net debt both rose on a quarter-on-quarter basis. The firm also pointed out cyclical challenges in RIL’s retail segment, which has the highest valuation multiple, and in refining, which generates the most free cash flow. These challenges are expected to unwind in 2025, marking a key factor in reversing the current estimate downgrade cycle.
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