Reliance may become a mini economy and shares may touch Rs 5,000 in 4-5 years; G Chokkalingam explains

Energy-to-telecom behemoth Reliance Industries (RIL) may rally to around Rs 5,000 by 2028, if one goes with the prediction of G Chokkalingam, Founder, Equinomics Research and Advisory. In his latest interaction with Sakshi Batra of Business Today TV, he said that the company’s shares may surge 100 per cent in the next 4-5 years. Shares of the company traded at Rs 2,482 on the NSE on May 11.

“Reliance is emerging as a 'mini economy'. It is integrating all the business verticals using technology. So, I would rather recommend a strong buy on RIL rather than any other new-age e-commerce companies,” he said adding my projections are based on the understanding of the economics, business of the index heavyweight and also their experience.

He further added that all of us know that RIL has multiplied the revenue and profit base of its telecom and retail businesses. “Now they are getting into renewable and green energy, FMCG, media and financial services businesses. They have a proven track record and have the ability to scale up the business. In the next 4-5 years, RIL would be a mini economy and its size would be comparable with a small state in India. This is not only in terms of size but also in terms of diversification across sectors,” Chokkalingam said.

The market watcher further added that they have adopted the smartest strategy in the FMCG business by acquiring decades-old brands. “I would say that one should ‘Hold’ RIL for 4-5 years with a possibility of 100 per cent upside,” he said.

Of late, Jefferies also gave a ‘Buy’ call on Reliance Industries with a target price of Rs 3,125. In the bull case scenario, it sees RIL at Rs 3,450. The global brokerage in a report on May 7 said the recent weakness in refining margins on indifferent global demand and sharply higher Russian exports should reverse on improving Chinese demand, better EU enforcement of Russian product import ban and a normal US driving season.

At the same time, Chokkalingam also thinks that smallcap and midcaps may outperform the benchmark equity index in the next 6 months. On the other hand, he thinks that the BSE Sensex and the NSE Nifty index may take a couple of more months to scale their new all-time high levels. The 30-share Sensex pack was at 61,904.52 on May 11, down 1,678.55 points from its all-time high of 63,583.07 scaled in December 2022.

“I am optimistic about the domestic equity market. Karnataka's election outcome may not change the direction of the market. The interest rate in the US may peak soon after another 25 basis points rate hike. In the worst case scenario, we may see another 50 basis point rate hike,” Chokkalingam said.