Morgan Stanley claims in its most recent study that each time RIL reimagined its company, it outperformed investor expectations
Reliance industry limited (RIL) has always gone large, and each capex cycle is bigger and “newer” than the last. According to Morgan Stanley, an American multinational investment management and financial services company, the oil, telecom, and retail conglomerate is currently in its fourth capex cycle, following a significant 75,000 crore (about. $9.4 billion) investment into a new energy ecosystem.
Morgan Stanley claims in its most recent study that each time RIL reimagined its company, it outperformed investor expectations. At the 45th annual general meeting, RIL chairman Mukesh Ambani described it as the most ambitious ever.
The report claims that the Investment cycles have unwound with about two to three times value generation for shareholders in the previous two decades with each decade witnessing around $60 billion in market cap creation.
As its new energy pivot is combined with its chemicals business and its own substantial captive usage, this fourth cycle will likewise deliver more value more quickly.
Morgan Stanley also predicts that the balance sheet leverage ratios will be the lowest ever during the current investment cycle. The reasons for this will include the rise in refining margins, the production of gas, rising telecom costs, the development of the food business, and the quicker monetization of new energy sources.
In addition to predicting repeated re-ratings of the retail and telecom sectors as these IPOs would unleash value, the brokerage expects many triggers for RIL over the next months across all industries.
It does anticipate that the value unlocking in telecom and retail would lead to certain holding company discounts.