Reliance: 3 key reasons why Morgan Stanley is overweight on conglomerate

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Reliance Industries share price has seen strong gains of more than 14% in 2024 and remains amongst top 10 Sensex stock gainers . Nevertheless if considered from closing lows in October 2023, the gains for Reliance Industries stock stand at phenomenal 31.6%. Morgan Stanley Research has maintained outperform ratings for Reliance Industries with target price of ₹3046 indicating more upside for the stock.

As per Morgan Stanley “ Its all about re-rating in this part of the value creation journey" For Reliance Industries as per Morgan Stanley, it all comes down to re-rating as net debt decreases, The investments slow down, the demand for fuel rises globally and long-term worries around demand fade. Besides telecom rate hikes are approaching close and the revenues from the new energy revenues are likely to start soon. Also Read- Hindustan Copper shares rise 9%, largest single-day rise since December 2023; what's driving the rally? As per Morgan Stanley, Reliance Industries has re-rated 10% Year to date and around 35% in the last one year.

Reliance Industries now trades at 24 times price to equity ratio and 10 times Enterprise Value (EV)/EBIDTA on FY2026 estimates as per estimates of Morgan Stanley. Morgan Stanley sees a potential for rerating of Reliance Industries stock around various verticals, namely new Energy, Refining , Chemicals and Telecom. As consensus over the past decade started factoring a faster fall in global fuel demand, Reliance Industries Energy vertical started seeing de ratings.