Reliance Industries' solar leap prompts Nuvama's highest-ever target price!

Domestic brokerage Nuvama Institutional Equities (Nuvama) has raised its target price on oil-to-telecom conglomerate Reliance Industries Ltd (RIL) to ₹1,801—the second highest on Dalal Street after Mirae Asset Securities (Buy, ₹1,950, 14/10/2024). The upgrade by Nuvama reflects RIL’s foray into external sales of high-efficiency solar modules and the major growth potential of its rapidly expanding New Energy business. 

The brokerage expects these developments to add majorly to profits and drive a re-rating akin to the market response during the RJio rollout in 2017.

At the core of this upgrade is RIL’s recent commencement of sales of heterojunction technology (HJT) solar modules, a move confirmed during the company’s latest analyst meet. According to Nuvama’s drill-down, “RIL has offered to sell its HJT modules in the lucrative domestic market,” even as its power generation rollout remains some time away. 

Nuvama forecasts that the company's 10GW module and cell capacity, to be fully operational by early CY26, could contribute an incremental ₹3,800 crore to consolidated profit after tax (PAT), equivalent to 6 per cent of FY25 earnings