This analyst expects Reliance Industries shares to rally over 20%

According to the analyst, Chinese overcapacity has weighed on renewable equipment profitability globally. It believes that the government’s ambitious installation target and lower bidding intensity should aid economics.

The firm’s economics will also be added by the government’s basic customs duty (BCD) on Chinese imports and possible exports to the US at premium prices, the brokerage said. It added that it sees little value being imputed to renewables in the current market price (CMP).

Meanwhile, from a stock perspective, Deven Choksey, MD, DRChoksey Finserv, said Reliance Industries shares' fundamental remains strong and convincing, be it in the conventional businesses of refining and petrochemicals, or higher growth in the oil exploration business, which continues to contribute around 50%-55% of the total EBITDA pie of the company’s entire book.

"On the consumer side of the business, the retail and the Jio platform business, also contribute 45% to 50% of the entire EBITDA of the company. So, all in all, put together I see nothing wrong with this particular business. On the contrary, consumer-facing businesses hold a large amount of potential, since they continue to grow at the rate of 20%, which is a steady rate of growth on such a large balance sheet," he added.

However, in 2023 (year-to-date), the stock has declined 4.45% as against the benchmark Sensex which has risen 13.5% during the period.