RIL stock trades flat in firm market post the 45th Annual General Meeting

Shares of Reliance Industries (RIL) traded flat at Rs 2,600 on the BSE in the intra-day deals on Tuesday, in an otherwise firm market, post its 45th Annual General Meeting (AGM) held on Monday, August 29, 2022. The stock opened at Rs 2,621.70 and has hit a low of Rs 2,578.50 so far. In comparison, the S&P BSE Sensex was up 0.80 per cent at 58,438 points.

On Monday, RIL ended nearly 1 per cent lower at Rs 2,596.80, as against 1.5 per cent decline in the benchmark index. In the past one week, the stock has underperformed the market by falling 1.8 per cent as against 1 per cent fall in the Sensex. Moreover, in the past three months, the stock of Mukesh Ambani-controlled company has lost 2.4 per cent as compared to 4.5 per cent rally in the benchmark index.

“We continue to like RIL’s business and balance sheet and believe all three of its core businesses – O2C, retail and digital services – have become selfsustaining and cash-generating, with retail and digital growing strongly. We continue to value RIL on a sum-of-the-parts basis and our target price of Rs 2,620 is unchanged,” wrote Puneet Gulati, Saurabh Jain and Evan Li of HSBC in a recent note.

In its 45th AGM, the conglomerate made a slew of announcements. Few takeaways were the launch of Jio 5G services in India in the next 2 months, launch of JioAirFiber- “fibre-like data” speeds over the air without any wires, Jio’s launch of JioMart on WhatsApp in partnership with Meta, Reliance Retail’s plan to launch fast moving consumer goods (FMCG) business this year, among many others. CLICK HERE FOR FULL DETAILS

RIL announced its entry into the FMCG segment, directly competing with the likes of Unilever and ITC, in line with chairman Mukesh Ambani’s stated ambition of retail becoming the group’s largest business segment. The company will launch its FMCG business with the objective to develop and deliver high quality, affordable products that solve every Indian’s daily needs, Reliance Retail Ventures director Isha Ambani said at RIL’s AGM.

ICICI Securities believe RIL is on the right track to diversify away from its conventional oil & gas business by creating an entire manufacturing ecosystem backed by strong technological partnerships and acquisitions. Key distinguishing factor of the company, typical attributes of any of its new venture, is the scale at which it is aspiring to capture the entire green energy value chain coupled with strong technological backbone, which will ensure value creation for all stakeholders, the brokerage firm said in a note.

The AGM touched upon the company’s ambitious plans across business verticals, particularly the ensuing 5G launch, foray into the FMCG space, and new energy investments, according to Motilal Oswal Financial Services.

ICICI Securities firm expects RIL’s consolidated revenue/EBITDA to clock 13 per cent/15 per cent compounded growth (CAGR) over FY22-24, which does not factor any incremental growth from 5G capex, new energy, and other segments. “Retail, Telecom, and new energy can be the next growth engines over the next two-to-three years, given the large technological advancements and ambitious growth targets. However, the same can dent its existing single-digit return ratios in the near term,” it said in a post-AGM note.

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