Jefferies has reiterated its buy call on Reliance Industries (RIL) with a target price of ₹1,670 after reviewing the company’s annual report, which it said reflected improving cash flows in Jio, steady progress in retail, and ongoing investments in renewables within the oil-to-chemicals (O2C) business.
The brokerage pointed out that consolidated capex remained flat year-on-year, with Jio and Retail seeing lower spending. Free cash flow improved, driven mainly by Jio, even as there was a marginal rise in net debt. Within the retail business, intangibles and capital work in progress accounted for 49% of fixed assets, up 440 basis points from last year, signalling a heavy focus on building out capabilities. Jefferies also highlighted a more than fivefold jump in third-party revenues for Jio Platforms as well as strong free cash flow generation as positives.
The brokerage said priorities for RIL include scaling home broadband and enterprise services in Jio, boosting FMCG and consumer product growth in retail, and accelerating renewable commitments in the O2C segment. Jefferies believes the diversified momentum across Jio, retail, and clean energy, coupled with consistent cash flow improvement, reinforces the investment case for RIL at current valuations.
Disclaimer: The views and recommendations made in this article are those of Jefferies. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
