Morgan Stanley has maintained its Overweight rating on Reliance Industries (RIL) with a target price of ₹1,617, suggesting a 10% upside from the current market price of ₹1,476. While the brokerage expressed disappointment over the lack of near-term growth confidence from the company’s June quarter results, it acknowledged that guidance remains ambitious, with plans to double earnings by 2029.
The brokerage flagged two key operational misses:
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Retail revenues grew 11% YoY, falling short of expectations for 17%, with the core (ex-connectivity) segment growing just 7%.
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Refining earnings underperformed, impacted by higher fuel oil prices and crude spreads.
Despite these, Morgan Stanley identified several bright spots:
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Telecom outperformed expectations, with robust subscriber additions and ARPU growth driving a quality beat.
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EBITDA from Exploration & Production (E&P) came in 5% above estimates, despite maintenance-related downtime.
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The balance sheet showed improvement, with stable net debt and lower capex, helping bolster financial flexibility. The company incurred capital expenditure of $3.5 billion during the quarter.
Morgan Stanley believes that RIL’s diversified business model, particularly strength in telecom, new energy, and a disciplined capital structure, provides a solid foundation for long-term growth, even as the near-term operating performance remains mixed.
Disclaimer: The brokerage view is based on publicly available research and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
