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New energy, AI infrastructure and funding from existing energy verticals of Reliance Industries Ltd will be key for the Indian conglomerate's next leg of value creation, Morgan Stanley has said in a report.
Besides, consumer vertical multiples of Reliance are also supportive for the value creation, multinational investment bank Morgan Stanley said in its July 3 report. "We see new energy + AI infrastructure as key to this journey, with funding from the existing energy vertical, which also should surprise on earnings. Consumer vertical multiples are supportive," the report said. The report analysed how Reliance Industries can achieve the next USD 50 billion in value creation. The pathway from a USD 240 billion+ market cap will again be about "reinvention", it noted. Gen AI is the next frontier for Reliance Industries as it retools the Jamnagar energy complex to monetise its energy production, the report said. Reliance is building Gen AI infrastructure in Jamnagar that it plans to be ready in two years. The report sees potential for up to USD 60 billion in value creation from the new energy vertical as Reliance Industries uses the electrons to power chemicals, data centers, and refineries. Reliance Industries sees its new energy business being "more ambitious, far more transformational, and far more global in scope than anything it's ever done before." Further, Morgan Stanley also believes India could become an alternative data centre hub with Reliance Industries providing some of the infrastructure. In the same report, Morgan Stanley said it remains overweight (OW) on Reliance Industries with a price target of Rs 1,617 per share. On Friday closing, Reliance Industries' share price was at Rs 1,528. The Morgan Stanley report expects a 14 per cent earnings CAGR over FY25-28, driven by oil-to-chemicals margins, supported by lower feedstock prices and strong domestic demand; strong traction in consumer brands driving growth in retail; and tariff hikes in telecom. (ANI)
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