Reliance Industries Limited (RIL) shares were trading higher on Tuesday after global brokerage Jefferies predicted a 33% rally as the stock continues to trade below its long-term average in recent weeks.

What Happened? In a note, the firm said RIL’s valuations fell below the long-term average after the recent correction, advising clients to ‘buy’ the shares with a price target of ₹3,100.

“This is attractive in view of 18% earnings growth in FY24E. The current stock price imputes zero value to RIL’s renewable business in our view,” the brokerage said.

The brokerage values RIL’s renewable business at $28 billion (₹2,31,586 crore) while adding that it expects private players to lead India’s transition to clean energy that looks to draw more than 50% of its power from non-fossil fuel sources by 2030 as per the Paris climate accord.

Jefferies anticipates RIL’s estimated $22 billion of capital expenditure in green product giga-factories and captive renewable generation to start over CY24-26 may boost shareholder value.

In terms of Q3 earnings, RIL’s revenue from operations for the quarter ended December 2022 came in at ₹2,20,592 crore, up 15.32% against ₹1,91,271 crore reported a year ago. Its consolidated net profit for the third quarter of FY23 stood at ₹17,806 crore, down 13.30% year-on-year (YoY).

Price Action: Reliance Industries Limited shares were up 2.45% to ₹2,381 on Tuesday afternoon.