Buy Reliance Industries, target price Rs 2430: Motilal Oswal

Motilal Oswal has buy call on with a target price of Rs 2430. The current market price of Reliance Industries Ltd. is Rs 2110.

Time period given by analyst is one year when Reliance Industries Ltd. price can reach defined target.
Reliance Industries Ltd., incorporated in the year 1973, is a Large Cap company (having a market cap of Rs 1456211.52 Crore) operating in Diversified sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 158133.00 Crore, up 23.11 % from last quarter Total Income of Rs 128450.00 Crore and up 12.65 % from last year same quarter Total Income of Rs 140373.00 Crore. Company reported net profit after tax of Rs 14981.00 Crore in latest quarter.

Investment Rationale
Using SOTP, the brokerage values the O2C business at FY23E EV/EBITDA of 7.5x, arriving at a valuation of INR764/share for the standalone business, and add INR68 for the E&P assets. It ascribes an equity valuation of a) INR847/share to RJio on FY23E 20x EV/EBITDA and b) INR755/share to Reliance Retail on FY23E 35x EV/EBITDA, factoring in the recent stake sale. We reiterate Buy, with TP of INR2,430/share. The higher multiple for the Digital business captures the revenue opportunity, potential tariff hikes, and opportunity in the Feature Phone market. The higher multiple for the Retail biz captures the acceleration in store openings, digital commerce, and the new JioMart platform.

Promoter/FII Holdings
Promoters held 49.1 per cent stake in the company as of March 31, 2021, while FIIs held 27.8 per cent, DIIs 12.5 per cent and public and others 10.6 per cent.