Reliance Industries - Turning New Energy Vision To Action: Motilal Oswal

Motilal Oswal Report

The Ministry of New and Renewable Energy recently announced its plans to-

1. set up two hydrogen hubs in India by FY26, and

2. provide incentives up to Rs 44.4 billion for electrolyzer manufacturing through a second tranche.

We believe both these announcements are key milestones toward the government’s vision to develop a robust green hydrogen ecosystem in India.

These initiatives also align with Reliance Industries Ltd.’s plans to establish a Giga-scale electrolyzer manufacturing facility.

Additionally, oil-to-chemical earnings in Q4 FY24 should remain robust, given sharp recovery in Singapore GRM to $7.4/barrel of oil (Q3 FY24: $5.5/bbl) even as key petchem spreads over naphtha are stable on a QoQ basis.

In the telecom business, we are building in 5%/4% compound annual growth rate for subs/average revenue per user over FY24-26 period, while in retail, we expect a 29% CAGR Ebitda (FY24- 26), led by store additions, higher store productivity, and foray into digital and new commerce.

We reiterate our Buy rating on the stock with a target price of Rs 3,210.

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