Morgan Stanley on Reliance Industries: Retains ‘Overweight,’ revises target price to Rs 1,606, sees 25.7% upside

Morgan Stanley has maintained its ‘Overweight’ rating on Reliance Industries (RIL) while revising its target price to ₹1,606 from ₹1,662. The revised target implies a potential upside of approximately 25.7% from the current market price (CMP) of ₹1,277.60. The brokerage highlights RIL’s transformation into a new energy company, which is expected to power artificial intelligence and provide India with essential infrastructure for the new tech era.

Morgan Stanley foresees investor debates shifting by the second half of the calendar year 2025 (2HCY25), as the company’s value-unlocking initiatives gain traction. While many investors are focused on retail multiples and refining/chemical earnings, the brokerage believes the opportunity for net asset value (NAV) expansion lies in new use cases for existing infrastructure, supported by a multi-decade low gearing.

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The report also anticipates a 15% compound annual growth rate (CAGR) in earnings from FY25 to FY27, driven by these transformative developments.

Current Market Price (CMP): ₹1,277.60 (Data as on 7:55AM, January 22, 2025)

Disclaimer: This article is for informational purposes only and does not constitute financial advice.