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The oil-to-telecom conglomerate run by billionaire Mukesh Ambani used the period to build strong digital capabilities of the retail business while continuing to expand its physical reach. Earlier in reports Mukesh Ambani said that companies should try to apply go green strategy.
With a possibility of a 10x growth in pre-tax take advantage of the business over subsequent decade, with retail including e-commerce are going to be subsequent growth engine for Reliance Industries Ltd, Goldman Sachs which said during a report. After growing 5x over FY16-FY20, RIL’s core retail revenue growth has taken a negative downfall in FY21 (April 2020 to March 2021) because of COVID related macro headwinds including lower footfalls.
The brokerage report said that, “We believe retail business (including e-commerce) is about to be subsequent growth engine for RIL, with potential for retail EBITDA to grow 10x over subsequent 10 years.”
During the macro downturn, RIL has focused on building strong digital capabilities and therefore the scale-up in omnichannel offering is driving sizeable market share wins.
Goldman Sachs valued RIL’s retail business at USD 88 billion in the base case and at USD 120 billion bull case valuation based on stronger than expected macro growth and market share wins.
It valued RIL’s retail business using discounted cash flow (DCF) at USD 57 billion for offline business and USD 32 billion for e-commerce.
Over subsequent 12 months, continued sequential earnings recovery is predicted along side catalysts around telecom tariff hikes, new product launches with Google, Facebook and Microsoft, and potential value unlocking from a proposed energy business stake sale.