Reliance Shares Jump As Brokerage Raises Price Target

Reliance’s share price jumped back in the green after another global brokerage raised its target price on the stock.

What Happened: Goldman Sachs has maintained its “buy” recommendation on Reliance and raised its price target to ₹3,400 from ₹2,925. This revised price target suggests a potential upside of 17% from Tuesday’s closing price of ₹2,883.15.

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The analysts highlighted that over the past decade, Reliance Industries has invested over $125 billion in capital expenditure, primarily in hydrocarbon and telecom sectors, which typically entail higher capital expenditure and longer gestation periods of over five years. However, Goldman Sachs highlights that the new businesses in which the company is investing more over the next three years, such as Retail and New Energy, are less capital-intensive and offer higher returns with shorter gestation periods.

According to the brokerage firm’s bull case scenario estimates, shares of the Mukesh Ambani-led conglomerate could potentially run up another 54% to ₹4,495.

Goldman Sachs still views the risk-reward profile of RIL favourably and has factored in the value accretion from the Reliance-Disney joint venture while increasing its price target.

Last week, another global brokerage firm UBS raised its target price on the stock from ₹3,000 to ₹3,420.

Price Action: Reliance’s share price was up 2.36% to trade at ₹2,951.15 as the markets opened on Wednesday.

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