Reliance Industries, a leading conglomerate headed by billionaire Mukesh Ambani, recently witnessed its share price reaching an unprecedented peak, propelling the company’s market value over the ₹19 lakh crore mark. The company’s shares experienced a significant surge, climbing as high as 4.19% to a new zenith of ₹2,824.00 per share on the Bombay Stock Exchange (BSE).
Similarly, on the National Stock Exchange (NSE), the share price of Reliance soared by 4.35%, also touching a record high of ₹2,824.00 per share. This remarkable growth positioned Reliance Industries as the top performer in the Nifty 50 index, substantially contributing to the index’s overall performance. The Nifty 50 itself saw an increase of 303.70 points, or 1.42%, reaching 21,656.30.
This surge in Reliance’s share price comes on the heels of the company’s impressive financial performance for the third quarter of the fiscal year 2024. The conglomerate reported a net profit rise of 11% year-on-year, amounting to ₹19,641 crore. This increase was primarily driven by robust growth in its consumer business segments, including retail and oil & gas. However, there was a noted decline in revenue from the oil-to-chemicals (O2C) division due to lower price realization.
Reliance Industries’ total gross revenue for the third quarter of FY24 escalated by 3.2% year-on-year, reaching ₹2,48,160 crore. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for the December quarter also exhibited an uptick of 17% to ₹44,678 crore, largely fueled by the retail and oil & gas sectors.
In the realm of digital services, Reliance’s EBITDA observed an 11% year-on-year growth. This was attributed to a modest increase in average revenue per user (ARPU) by 2% year-on-year to ₹181.7, along with a 9% rise in the customer base, now standing at 471 million.
Financial services firm Emkay Global Financial Services commented that Reliance’s earnings for the third quarter of FY24 were mostly in line with expectations. They noted a slight shortfall in EBITDA from the O2C and Jio segments, which was balanced by stronger performance in other areas like Upstream, due to reduced operational expenses, and Retail. Emkay Global maintained its earnings estimates for FY24-26, but raised its sum-of-the-parts (SOTP) based target price for Reliance Industries shares by 8% to ₹2,950, citing developments in new energy ventures, a higher target for Jio’s EV/EBITDA, and an extension to December 2024 estimates. The firm continues to recommend an ‘Add’ rating for the company’s shares.
Additionally, Nuvama Institutional Equities highlighted Reliance’s rapid strides in initiating production in its New Energy chain and its strategic mergers & acquisitions, production-linked incentives (PLI) victories, and plant progress. The brokerage underlined the need for a valuation re-assessment for Reliance’s New Energy business, especially considering its fully integrated 20GW module capacity. Consequently, Nuvama raised its target price for Reliance shares by 5% to ₹3,105, rolling forward the valuation of the New Energy business to FY26E sales and maintaining a ‘Buy’ rating.
As of 12:00 pm, Reliance Industries’ shares were trading at ₹2,821.85 per share on the BSE, up by 4.11%, with a market capitalization of ₹19.08 lakh crore, marking a significant milestone in the company’s journey and reflecting its robust financial health and promising future prospects.
The exceptional performance of Reliance Industries in the stock market, especially its record-breaking share price and market capitalization, is a testament to the company’s strategic diversification and consistent growth across various sectors. This achievement is particularly noteworthy given the challenging global economic environment, underscoring the strength and resilience of Reliance’s business model.
Reliance’s diverse portfolio, spanning from traditional sectors like oil and gas to burgeoning areas such as retail, digital services, and new energy initiatives, plays a crucial role in its financial success. The company’s focus on innovation and expansion into new domains, such as renewable energy, is aligned with global trends and the increasing emphasis on sustainable practices. This strategic direction not only bolsters Reliance’s market position but also contributes to its long-term sustainability and growth potential.
The company’s ability to continuously adapt to changing market dynamics while maintaining a strong focus on customer satisfaction and operational efficiency has been key to its success. This adaptability, combined with its significant investments in technology and infrastructure, positions Reliance Industries favorably for future growth.
As Reliance Industries continues to evolve and expand its business horizons, it remains a pivotal player in the Indian economy. Its influence extends beyond the stock market, impacting various sectors and contributing significantly to India’s economic development. The company’s record-breaking market capitalization and share price are not just indicators of its financial strength but also reflect its central role in shaping the future of India’s corporate landscape.