Jefferies has reiterated its Buy rating on Reliance Industries Limited (RIL) with a target price of Rs 3,400, despite a weak quarterly performance. The brokerage noted a significant miss in the company’s Oil to Chemicals (O2C) business, along with smaller misses in Jio and Retail segments based on modest estimates.
In its report, Jefferies highlighted that RIL’s retail business is focusing on B2B operations and store rationalization, aiming for better margins in the second half of FY25, with a growth recovery expected in FY26. However, Jio’s subscriber decline came as a surprise, though the brokerage anticipates strong growth over FY25-27.
The O2C segment’s profitability remains under pressure due to weak demand, leading Jefferies to lower its EBITDA estimates by 8% for FY25 and 6% for FY26. Despite these adjustments, the sharp 14% correction in the stock recently presents a favorable valuation, according to the brokerage.
Current market price (CMP) of Reliance Industries stands at Rs 2,745.50.
Disclaimer: Stock investments are subject to market risks. Readers are advised to seek independent financial advice before making any investment decisions.
