Highlights
- Reliance’s stock may climb 83 percent in a year
- Green energy business will become the growth engine for the company
- Company to invest Rs 75,000 crore on clean energy
- The company aims to become net carbon neutral by 2035
If you have shares of the country’s most valuable company Reliance Industries, then there is good news for you. According to analysts of Goldman Sachs, the shares of this company headed by Asia’s biggest rich Mukesh Ambani can rise up to 83 percent in a year. He says that there are many reasons which can act as a catalyst for this stock in the coming days.
These analysts said in a note on Tuesday that the green energy business could become a growth engine for Reliance Industries for the next decade and could drive the company’s stock price higher. With this, the share price of the company can go up by 35 percent i.e. up to Rs 3,185 at the base price. The company’s shares may jump due to the steady recovery in each division of the company, new digital product launches and a clear picture of the roadmap for new energy business.
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Growth engine will become green energy business
Nikhil Bhandari, co-author of the note, said that due to these reasons, the company’s earnings can grow at a compound annual rate (CAGR) of 41 per cent during FY 2021 to 2023. He said that in the coming days, the growth engine of the company will be green energy business. Ambani had announced this year that Rs 75,000 crore would be invested in the clean energy business in the next three years. The company aims to become net carbon neutral by 2035.
Analysts said the return on investment in the new energy business is much higher than the old energy while the cost of capital is lower. The majority of Reliance’s investment in the new energy business will go to solar. After that the number of batteries will come. The company’s capex in hydrogen will come only at the end of this decade when the return on investment in solar and batteries starts to come.
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