2024 hasn’t been a good year for Reliance Industries (RIL). People are worried because RIL’s shares are likely to end the year with losses, which hasn’t happened in almost ten years. The company’s value dropped by more than Rs 4.4 lakh crore since it peaked in July, with shares falling about 21% from their highest point of Rs 1,608.95.
In the past, RIL had great years, like a 70.55% return in 2017. But things slowed down in 2021 with just 19.32%, and it got worse: 7.60% in 2022 and only 1.44% last year. This year looks even worse due to slow earnings impacted by a tough economy.
Challenges for Reliance Retail
Reliance Retail (RR) also faced many problems this year, especially in the fashion sector. The company needed to close 1,185 stores and isn’t making enough money, even though more people are visiting the stores. Competition from quick delivery companies has made it harder for RR.
However, analysts like Jefferies believe RR remains a strong player and should focus on better opportunities to attract more investors. They still recommend RIL as a good investment with a target price of Rs 1,700.
What’s Next for RIL?
Another brokerage, JPMorgan, says RIL looks good compared to other high-priced stocks. To boost its shares, RIL needs better earnings, especially from its retail branch. Since RR is valued less than its competitors like DMart, any rise in its value could help RIL’s stock price.
RIL’s growth used to come from investing in refineries and chemicals, but now, RR and Telecom bring in about half of RIL’s profits. RIL is expected to make positive cash flow in the future and aims to keep its debts low.
Mukesh Ambani, once worth $120.8 billion, sees his wealth fall to about $96.7 billion. He is now focusing on digital services, retail brands, and green energy for future growth.
Future IPOs
Ambani plans to list Jio on the stock market in 2025, which could be worth over $100 billion. However, an IPO for the retail section may come later, depending on how the company handles its internal problems.
Despite facing many challenges in the retail market, Reliance is still moving forward with plans like a partnership with Walt Disney for a big media company in India and working with Nvidia to build AI technology. RIL remains valuable, but the oil sector problems have affected its stock prices
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