Nuvama Institutional Equities has reaffirmed a bullish outlook on Reliance Industries Ltd. (RIL), maintaining a ‘Buy’ rating with a revised target price of Rs. 1,801—projecting a 20% upside from current levels. The brokerage anticipates that RIL's New Energy division will emerge as a key growth driver, contributing up to 50% of profit after tax (PAT) by FY30. The segment, including solar modules and power, is forecast to grow net profit from Rs. 2,000 crore in FY27 to Rs. 11,400 crore by FY30, supported by capacity expansion, operational ramp-up, and margin tailwinds from differentiated solar modules.
Strategic Reorientation: New Energy at the Forefront
Reliance Industries, historically known for its dominance in petrochemicals, refining, and telecommunications, is undergoing a structural transformation. At the core of this shift is its New Energy vertical—a segment that includes solar module manufacturing, renewable power generation, and emerging clean tech initiatives.
According to Nuvama’s latest institutional note, this vertical is expected to contribute 9% of RIL’s consolidated PAT by FY30, rising from a negligible share in recent years. The estimate is based on conservative modelling, suggesting there may be further upside if deployment accelerates or margins exceed current expectations.
Profit Outlook: Exponential Growth Projected
Nuvama projects that net profit from the New Energy segment will grow at a compound annual growth rate (CAGR) of 140%, rising from Rs. 2,000 crore in FY27 to Rs. 11,400 crore by FY30. This performance, if realized, will position the vertical as a central profit engine within the group.
The firm noted that RIL has signaled its ambition to generate over 50% of consolidated profits from this segment by the end of the decade—an objective first articulated during the company’s Annual General Meeting in 2024.
Such a shift would mark one of the most significant earnings transformations in Indian corporate history, redefining RIL's identity as an integrated green energy conglomerate.
Solar Module Play: Premium Products and Operational Leverage
A key driver of the profit surge is Reliance’s foray into solar module manufacturing. Nuvama expects the company to generate Rs. 3,800 crore in net profit from its initial 10GW module capacity, assuming a 75% utilization rate and modest pricing premiums.
Notably, the estimate hinges on Reliance's Domestic Content Requirement (DCR) modules commanding a 5% premium in the market—indicating strong brand positioning and supply-side differentiation.
This projected contribution represents approximately 6% of RIL’s consolidated PAT for FY25, reinforcing the immediate financial relevance of the solar vertical within the broader business strategy.
Catalysts for Growth: Policy, Scale, and Execution
Reliance’s clean energy roadmap benefits from structural tailwinds. India’s energy transition policies, rising global demand for solar infrastructure, and the company's demonstrated execution capabilities provide a conducive backdrop.
Nuvama emphasizes that faster ramp-up in manufacturing, accelerated deployments, and entry into adjacencies such as green hydrogen and battery storage could further lift profitability beyond current projections.
Given the group’s historical ability to scale complex businesses—ranging from petrochemicals to digital platforms—the market views RIL's clean energy aspirations with cautious optimism backed by proven operational depth.
Market Positioning and Valuation
With a target price of Rs. 1,801 per share, Nuvama’s recommendation is among the most optimistic in the current brokerage landscape. The report cites not just long-term profit growth, but also the strategic value embedded in RIL’s evolving business mix.
Investors, particularly those seeking long-term exposure to India’s energy transformation and industrial decarbonization, are likely to view RIL as a high-conviction opportunity. The potential of the New Energy segment offers both ESG credentials and earnings visibility, a combination increasingly prized in modern portfolio construction.
Conclusion
Reliance Industries appears well-positioned to redefine its legacy by pivoting aggressively into clean energy. With a robust pipeline of projects, premium product positioning, and strong institutional backing, the conglomerate's New Energy ambitions may soon transition from strategy to sustained value creation. If realized, this shift could not only reshape RIL’s earnings profile but also reinforce its role as a bellwether in India’s industrial evolution.
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