One of the largest businesses in India, Reliance Industries Limited (RIL), has dominated the industry for many years. Following a year of fluctuations, Reliance shares saw a 17% increase in 2024, drawing the interest of both market analysts and investors.
However, what lies ahead for the company and its shareholders for the rest of the year? This article looks at the factors for this remarkable rise and what investors can anticipate going forward.
About Reliance Industries Limited
Reliance Industries, which Dhirubhai Ambani founded in 1958, began as a textile business and has now expanded into a multinational corporation with holdings in retail, oil and gas, telecommunications, green energy, finance, etc.
It plays a significant role in both the Indian stock market exchanges like the NSE and BSE Sensex. The business is run by:
- Oil-to-Chemical (O2C): The main source of income for Reliance includes petrochemicals and refining.
- Jio Networks: A leader in telecom, quickly growing its 5G network.
- Retail: A major participant with a significant online presence in India’s retail market.
- Green Energy: Financial commitment to renewable energy sources to achieve sustainability.
Reason Behind 17% Increase in Reliance Stock?
In 2024, Reliance share price increased 17% because of the following reasons:
- Solid Financials: Reliance posted a net profit of ₹15,138 crore in the first quarter of FY25. Revenue surged 11% to ₹2.36 lakh crore, driven by strong performance in the Oil-to-Chemicals (O2C) and Oil & Gas segments.
- Jio Platforms Growth: Jio Platforms, which houses Reliance Industries’ telecom and digital businesses, reported a robust performance in the first quarter. The company added 8 million new subscribers, bringing the total to 490 million. Fueled by 5G adoption, Jio’s ARPU remained steady at ₹181.7.
- Retail Expansion: Reaching ₹80,000 crore in Q1 of FY2025, Reliance Retail grew by 20%. Moreover, 1,200 new stores were opened, and the online presence was increased, thereby strengthening the overall retail position.
- Strategic Partnerships and Investments: In line with its objectives for renewable energy, Reliance invested $2 billion in green hydrogen projects and obtained $1.5 billion in investments for Jio Platforms.
- Market Sentiment: Reliance has performed well as a stock, making it a preferred investment. This is partly due to a favourable Indian stock market, with the indices (Nifty 50 & Sensex) gaining by more than 20% in the last 1 year.
What Can We Expect for the Rest of 2024?
The following are the main variables that will influence Reliance’s success in 2024:
- Investments in Green Energy: To reach 100 GW of solar power by 2030, Reliance plans to invest ₹75,000 crore in renewable energy. With these expenditures, Reliance will become a leader in sustainable energy and can see long-term growth.
- Jio’s 5G Expansion: By the end of 2024, Jio aims to provide 5G coverage for 80% of India’s population, solidify its position as the industry leader, and increase revenue through increased ARPU.
- Retail Growth: To boost market share and income, Reliance Retail plans to open 2,000 new outlets, primarily in tier 2 and tier 3 cities. Growth will be driven by the combination of online and offline channels.
- Strategic Acquisitions: Reliance’s latest ₹7,000 crore logistics acquisition will increase operational efficiency. The company also plans to diversify its portfolio further with increased investments in technology and healthcare.
- Global variables: Reliance’s performance will be impacted by global variables such as the price of oil and geopolitical tensions, even though its diversified business will give stability in the long run.
The Bottom Line
The company’s outstanding performance and strategic activities across its business areas are reflected in the 17% growth in Reliance shares in 2024. Reliance has made significant investments in telecom, retail, and green energy, positioning itself for future growth.
Investors can expect the business to provide long-term value through its diverse holdings and well-planned vision. 2024 may be a turning point for Reliance and its stakeholders if the company continues to implement its expansion plans successfully.
