RIL rerating: Waaree, Premier Energies send cues; Nuvama’s Reliance target highest on D St

The valuations of Waaree Energies ($10 bn EV) and Premier Energies ($6 bn EV) offer a possible benchmark for the next re-rating in Reliance Industries Ltd (RIL). These companies operate at lower capacities compared to RIL’s upcoming 20 GW fully integrated solar module and cell facility, suggesting meaningful headroom for RIL’s valuation upside.

Nuvama noted that RIL has started selling high-efficiency HJT solar modules in the domestic market, ahead of its full-scale power generation rollout. These modules, now included in MNRE’s Approved List of Models and Manufacturers (ALMM), are priced at a 5 per cent-plus premium to TOPCon modules.

At 10 GW capacity and premium pricing, Nuvama estimates this new module business could contribute Rs 3,800 crore—or around 6 per cent of RIL’s consolidated FY25 PAT. By assigning a 15 times EV/Ebitda multiple (in line with Waaree and Premier) to RIL’s solar module business, Nuvama arrives at a $20 billion enterprise value for the segment. It believes this could trigger a broader re-rating for RIL, akin to the post-RJIO launch in 2017.

“Further integration into wafers, polysilicon, etc to add upside potential,” it said.

Nuvama also expects the New Energy business to lift overall PAT by 50 per cent-plus over time, driving a revaluation of even the legacy O2C segment as RIL targets net-zero carbon by 2035.

As a result, it raised its target price for RIL to Rs 1,801—the highest among analysts on Dalal Street—to reflect higher-than-expected earnings from the solar module business.

At its AGM in August 2024, Reliance Industries outlined an ambitious growth trajectory for its New Energy business, projecting that its profitability could match that of its Oil-to-Chemicals (O2C) segment within the next five to seven years. Notably, O2C remains RIL’s largest profit contributor, currently accounting for around 40 per cent of Ebitda and over half of attributable PAT.

In line with its strategic roadmap, RIL is developing integrated solar manufacturing facilities and a 30GWh battery storage plant. Progress on green hydrogen and electrolyser manufacturing remains on track, bolstered by a technology partnership with Nel ASA. The company also aims to establish 55 compressed biogas (CBG) plants across the country.

Nuvama said investors should closely monitor the upcoming AGM, scheduled for August or September, for further updates on these transformative initiatives.