The retail business of Reliance Industries (RIL) is expected to grow three-fold over the next three to five years with a strong compound annual growth rate (CAGR) of 35-40 per cent, revealed a Bernstein report. It added that digital or new commerce is growing slowly and contributes 10 percent of sales. It further said that Reliance had recently announced that the clean energy business could be valued at around USD 36 billion.
The Bernstein report states that most clean energy companies are trading at 2-3x p/s. Based on the capital expenditure for clean energy, it is observed that there is a path for Reliance to build a clean energy business which could be worth USD 36 billion or 395/sh.
Reliance recently announced plans to invest USD 10 billion in a new energy business over the next 3 years in the next phase of its transformation. Under the announced plans, the company will invest $10 billion in capital expenditures in solar, batteries and hydrogen to create an integrated clean energy ecosystem. The report added that other big announcements at the AGM were the launch of the new smartphone JioPhone Next and the induction of Aramco’s chairman on the Reliance board, which is positive for the spin-off in O2C.