Reliance share price hits a record high, m-cap tops ₹21 lakh crore mark; can it rise further after Jio tariff hike?

Reliance share price: Shares of oil-to-telecom-to-retail conglomerate Reliance Industries (RIL) jumped over 2 per cent to hit its fresh all-time high of ₹3,129 in morning trade on Friday, June 28, on BSE. With this, the market capitalisation (mcap) of Reliance stock jumped to over ₹21 lakh crore mark for the first time. Reliance share price opened at ₹3060.95 against its previous close of ₹3061.10 and soon rose 2.2 per cent to its all-time high level. However, the stock pared some gains and traded 1.09 per cent higher at ₹3,094.50 around 10:30 am. Equity benchmark Sensex was 0.34 per cent up at 79,513.54 at that time.

Reliance share price has seen healthy gains this year so far, outperforming the benchmark index. Considering Friday's high, the stock has gained 21 per cent this year so far while the Sensex has risen 10 per cent.

In the last one year, the stock has jumped about 36 per cent against a nearly 25 per cent gain in the benchmark Sensex.

On a monthly scale, Reliance's share price fell in the last two months but has seen traction this month amid the chatter of healthy topline growth in the company's all group segments.

According to Sandeep Pandey, founder of Basav Capital, the market is anticipating topline growth across all Reliance Industries group companies segments, thanks to India's healthy economic growth.

"The projected robust economic growth in India is expected to benefit leading Indian companies, including Reliance Industries. The textile, petrochemical, telecom, and retail businesses are all expected to thrive in the upcoming quarters. The market is anticipating a fresh rally in the stock post the Union Budget 2024," Pandey said.

More steam left?

Some brokerage firms and analysts expect the stock to rise more, especially after its telecom arm Reliance Jio raised the tariff by about 20 per cent which will aid its ARPU (average revenue per user).

Jio has raised the prices of its existing plans from monthly to annual. There are six monthly plans. The existing monthly plan of ₹155 has been revised to ₹189, and other plans in the category have been revised.

The two-month plan of ₹470 has been revised to ₹579, and the three-month plan has been revised from ₹395 to ₹479.

Brokerage firm Motilal Oswal Financial Services has a buy call on the stock as it believes the 20 per cent tariff hike would increase ARPU by 15 per cent ( ₹206 ARPU in FY25E) since the prices are not increased for all plans.

Motilal Oswal has slightly raised the target price to ₹3,275 versus ₹3,245 previously, ascribing an equity valuation of ₹840 per share to RJio, ₹1,593 to Reliance Retail and ₹37 to the new energy business.

It also raised its revenue and EBITDA estimates by 11 per cent and 17 per cent, respectively, for FY25 and FY26.

"We expect EBITDA of ₹70,100 crore and ₹79,800 crore and factor in a CAGR of 17 per cent and 23 per cent in revenue and EBITDA, respectively, during FY24-26," Motilal said.

"RJio is valued at an EV/EBITDA multiple of 12 times on FY26E EBITDA, thereby arriving at a valuation of ₹840 per share, adjusted for its 66 per cent stake versus ₹810 per share previously. Based on SoTP, we value the refining and petrochemical segment at 8 times FY26E EV/EBITDA to arrive at a valuation of ₹1,029 per share for the standalone business," said Motilal.

On the technical front, experts say the stock may continue witnessing bullish momentum as long as it trades above the ₹3,000 mark.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, pointed out that Reliance share price has surpassed its previous high of ₹3,029 and is maintaining its position well above this level, which is a positive indicator for the stock's performance.

This upward momentum suggests a strong bullish trend.

Patel believes the stock may complete its 1:1 leg in the range of ₹3,160-3,198, as illustrated in the chart given below.

"This range might attract some profit booking from investors, potentially causing temporary resistance. Additionally, the Relative Strength Index (RSI), a momentum oscillator, has bounced back from the 50 level on the daily chart, signalling a buying opportunity on dips," said Patel.

"As long as Reliance holds the critical support level at ₹3,000, it is expected to continue its upward trajectory, reflecting sustained investor confidence and potential for further gains,' Patel said.

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