Reliance Industries - How The Growth Levers Are Stacked: Motilal Oswal
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Motilal Oswal Report
Reliance Jio, the telecom vertical of Reliance Industries Ltd., is in a sweet spot as peers Bharti Airtel Ltd. and Vodafone Idea Ltd. have taken a 20% tariff hike. We expect RJio to follow suit, garnering a 23%/7% upside on RJio / consolidated Ebitda.
Further, improving traction in JioPhone Next should be an aiding factor.
The retail segment is seeing strong revival across categories during the festive season, accelerated store adds, and healthy scale in the digital business – these factors should drive sharp growth from Q3 FY22.
Gross refining margins are weakening amid a worsening Covid-19 situation in Europe. However, the petrochem segment should offset the impact on the back of good demand and continued delays in upcoming capacities.
Reliance Industries is trading at enterprise value/Ebitda and price/earning of 12 times and 19 times, respectively, on an FY23E basis.
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