Goldman Sachs Forecasts Robust Growth Trajectory for Reliance Industries
Reliance Industries Ltd., led by Mukesh Ambani, has long been a cornerstone of India’s corporate landscape. However according to recent projections from brokerage firm Goldman Sachs, the conglomerate’s stock may be poised for a significant upswing. In their bull case scenario for FY 2026, Goldman Sachs suggests that Reliance Industries shares could soar by as much as 54%, reaching ₹4,495.
Goldman Sachs’ optimism is based on several key factors. Firstly, the firm maintains a “buy” recommendation on Reliance Industries, raising its price target to ₹3,400 from ₹2,925. This revised target implies a potential upside of 17% from current levels. The bullish outlook is supported by expectations of value accretion from the Reliance-Disney joint venture, as well as promising growth prospects in new business verticals.
One of the main drivers of growth identified by Goldman Sachs is Reliance Retail, which is expected to see a significant increase in earnings before interest, tax, depreciation, and amortization (EBITDA) between FY 2024 and FY 2027. The firm anticipates that Reliance Retail’s EBITDA will nearly double during this period, with the share of consolidated EBITDA rising to 14.3% by FY 2027.
Additionally, Goldman Sachs is optimistic about Reliance Industries’ foray into the New Energy sector. The firm predicts that the New Energy vertical will start contributing positively to EBITDA from FY 2025 onwards, reaching $2.3 billion by FY 2030. This diversification away from traditional, capital-intensive businesses like hydrocarbon and telecom is seen as a positive development, with the new ventures offering higher returns and shorter gestation periods.
Furthermore, Goldman Sachs expects Reliance Industries’ free cash flow to turn positive by FY 2025, driven by a combination of factors including a peak in capex, growth in EBITDA, and improved margins in key segments such as telecom and petrochemicals. The firm forecasts a 17% EBITDA compound annual growth rate (CAGR) between FY 2024 and FY 2027, underpinned by strong performance in retail, telecom, and petrochemicals.
Goldman Sachs also highlights two potential catalysts that could drive further upside for Reliance Industries shares. Firstly, the firm expects expanding returns to fuel outperformance relative to the broader market. Secondly, they anticipate value unlock through potential listings of consumer businesses, which could lead to valuation discovery.
The bullish sentiment from Goldman Sachs is echoed by other brokerage firms, with UBS recently raising its price target on Reliance Industries to ₹3,400. This positive outlook comes amid a broader rally in Reliance Industries shares, which have surged 29% over the last 12 months.
In conclusion, Goldman Sachs’ bullish stance on Reliance Industries reflects confidence in the conglomerate’s strategic initiatives and growth prospects across key business segments. With favorable risk-reward dynamics and a promising outlook for retail and new energy sectors, Reliance Industries appears poised for a period of sustained growth and value creation.
