Centrum Broking: Reliance Industries - Creating A Future Ready Ecosystem 

Centrum Broking Report

Reliance Industries chairman Mukesh Ambani in the 43rd AGM of the company gave valuable updates on recent business developments and growth roadmap going forward. He emphasised that the three pillars for creation remain the Jio platforms business, the new commerce business as part of RIL retail and the gradual transformation of the O2C business to a new materials and new energy business. Overall, with zero net debt objective having been achieved ahead of time, game changing partnerships with the big three (Facebook, Google and Microsoft) and expectations of similar unlocking now starting in retail, RIL stands on a strong footing over the next 5-7 years.

We have raised estimates of Average Revenue Per Unit, lowered costs for Jio (based on management feedback) while for retail we now move to DMart multiples as the benchmark as we do not see any other comparable story for RIL – resultant of these revisions, target price raised to Rs 2,015 per share, 9.3% upside. We note that looking beyond FY22E for retail and building a nominal share of traditional retail by FY25E can deliver a bull case and blue sky of Rs 767 to 862 per share for retail, adding Rs 114 to 209 per share to RIL SoTP

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