Brokerage houses decode Reliance’s AGM:Jio IPO will open path to earnings, growth will come from New Energy and AI

Reliance Industries (RIL) shares surged more than 2% during today’s trading session. The company’s stock reached the level of ₹1,345. After the 49th Annual General Meeting (AGM) held on Friday, several major brokerage houses have released their analysis reports regarding its future roadmap and the Draft Red Herring Prospectus (DRHP) filed with Sebi for Jio Infocomm’s IPO. Jio’s IPO and Value Unlocking Reliance Intelligence: AI Hub Plan Nomura stated in its report that ‘Reliance Intelligence’ has now moved from the planning phase to the execution phase. The Sovereign Artificial Intelligence (AI) hub being built in Jamnagar is targeting the first 120 megawatt (MW) capacity by the end of financial year 2026. This is a major capex investment in the initial phase for Reliance. Oil-to-Chemicals and Dahej-Nagothane Projects According to MK Global, the next phase of growth in the Oil-to-Chemicals (O2C) segment will come from investments in high-value chemicals and materials. The 3 mmtpa capacity PTA project in Dahej is progressing rapidly, which will strengthen Reliance’s position in the polyester value chain. Meanwhile, the 1.2 mmtpa capacity PVC project in Nagothane will reduce India’s dependence on imports and meet domestic demand in the infrastructure, construction, and consumer segments. MK Global has given a buy rating on the share with a target price of ₹1,680. Target to Double EBITDA in 5 Years Antique Stock Broking said that the company has set a target to more than double its consolidated Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) in the next 5 years. This means that by FY 2031, EBITDA could reach ₹4.2-4.5 trillion. If this happens, Return on Capital Employed (ROCE) could double, leading to a re-rating of the stock. New Energy and Jio Trigger Antique Stock Broking believes that after Jio’s IPO, with the commissioning of a 10 GW integrated solar project and 40 GW battery plant this year, Reliance’s re-rating in the market will continue consistently. Following this, solar + battery and hydrogen projects in Kutch will also commence. The brokerage has reiterated a buy rating with a target of ₹1,670. Digital Segment to Remain Growth Driver According to Motilal Oswal Financial Services, Reliance Jio will remain the company’s biggest growth driver, and the digital segment will contribute approximately 80% of Reliance’s total incremental EBITDA. Between FY 2026-28, wireless tariff hike (15% increase in Q2 of FY-2027), growth in wireless market share, and expansion of homes and enterprise segments could result in an EBITDA CAGR of 18%. Reduction in Capex and Free Cash Flow Nuvama’s Outlook and Risk Factors According to Nuvama, the new energy business will start making a significant contribution to financial performance from FY 2027. The capacity of operational solar module/cell plants is being increased to 20GW, which could lead to a 5% increase in profit after tax (PAT) for FY 2026. Reliance Intelligence (RI) and Reliance Consumer Products (RCPL) will be the company’s new growth engines. Nuvama has given a target price of ₹1,765, but has also cautioned that slowdown in global demand or increase in capacity could impact refining and chemical margins. What is DRHP? Draft Red Herring Prospectus is an initial official document that any company submits to market regulator SEBI before launching its IPO. It contains complete details of the company’s business, financial position and risk factors. What do EBITDA and CAGR mean? EBITDA stands for Earnings Before Interest, Tax, Depreciation and Amortization, which represents the company’s core operating profitability. CAGR (Compounded Annual Growth Rate) is used to measure the average annual growth of investment or earnings over a fixed period.