RIL share valuation hits Covid-era lows: 6 signals indicate a turnaround
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Amid earnings downgrades and target price cuts, largely driven by weakness in the retail business and a sharp decline in refining margins, Reliance Industries (RIL) shares are down about 23% from their peak in July, bringing valuations to their cheapest level since the Covid shock of March 2020. Goldman Sachs analysts believe that the sell-off in RIL shares, which have underperformed by declining about 6% in the last year, is overdone as the share price is now near its bear case scenario which assumes lower for longer refining margins, weak telecom ARPU/subscriber growth and lower TAM/market share growth in retail. Not just Goldman, but other major global brokerages like Jefferies, Morgan Stanley, CLSA and Bernstein have released reports in the last few days giving buy ratings with target prices going up to Rs 1,690. Saying that the valuations are now undemanding, analysts say the risk-reward is now favourable giving a great entry point t...