
Morgan Stanley sees $60 bn upside as RIL powers Gen AI with new energy push.
Market Momentum Building
Near-Term Earnings Catalyst
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
Billionaire Mukesh Ambani could add up to $60 billion in market value for Reliance Industries Ltd (RIL) shareholders by integrating the company's new energy business with artificial intelligence (AI), according to Morgan Stanley Global brokerage firm Morgan Stanley sees significant potential for value creation as Reliance Industries Ltd (RIL) retools its sprawling Jamnagar energy complex to become India's AI infrastructure backbone. The move positions the conglomerate to capitalise on the artificial intelligence boom while addressing the global challenge of powering energy-intensive data centres.'Gen AI is the next frontier for RIL as it retools the Jamnagar energy complex to monetise its energy production – a key hurdle globally for Gen AI ramp-up,' Morgan Stanley said in its latest research report. 'We see potential for up to $60 billion in value creation from the new energy vertical as RIL uses the electrons to power chemicals, data centres, and refineries.'According to the company, Reliance views its New Energy business as 'more ambitious, far more transformational, and far more global in scope than anything it has ever done before.' The conglomerate is building Gen AI infrastructure in Jamnagar, which it plans to operationalise within two years. This includes a plan to power 1GW of data centre capacity using NVIDIA's cutting-edge Blackwell chips.Morgan Stanley estimates that a 1GW data center facility would require approximately 678,000 B100 chips. If Reliance allocates around 200MW for internal use, it would need roughly 135,000 B100 chips. When scaled up—a process that typically takes 4–5 years from startup—1GW of data center capacity would require approximately 1.3GW of round-the-clock power.During its Q3FY25 earnings call, Reliance shared more strategic insights, outlining its plans to capitalize on AI adoption trends by building a comprehensive national AI infrastructure. The company is already emphasising 'large-scale internal adoption of AI' and is actively embedding AI across all group-wide processes.Shares of RIL have surged 26% so far in the calendar year, reflecting growing investor confidence in Ambani's transformation strategy. Morgan Stanley remains overweight on RIL with a price target of Rs 1,617 per share, expecting a 14% earnings CAGR over F25–28."Investor focus on RIL's Gen AI investments is limited – earnings impact needs clarity. However, other energy/power players globally have re-rated on the strength of the Gen AI theme before earnings are realized," the brokerage noted.The firm values RIL's new energy business using a P/B multiple of 3x as it ramps up investments in solar supply chain, battery capacity expansion and progress in green hydrogen capacity. Morgan Stanley's bull case scenario value reaches Rs 2,034, while the bear case sits at Rs 1,210.The upcoming Q1 earnings should provide immediate momentum, with Morgan Stanley forecasting a rise in O2C earnings supported by very strong global fuel margins, partly cushioned by refinery maintenance. Retail revenue growth is expected at approximately 17% year-on-year with stable quarter-on-quarter margins.Telecom should show around 6.5 million subscriber net additions quarter-on-quarter with a slight increase in ARPU. Overall consolidated EBITDA should rise 16% year-on-year and consolidated earnings should surge 27%."Global pricing for panels has found a floor. Large players turned FCF-negative in 2024 and have seen increased capex and pricing discipline in the supply chain," Morgan Stanley observed. "The upcoming Jun-25 quarter (flat QoQ) should raise investor confidence in earnings delivery and quality, with refining, chemicals, and retail meeting expectations."The brokerage expects 14% earnings CAGR to be driven by O2C margins supported by lower feedstock prices and strong domestic demand, strong traction in consumer brands driving retail growth, and tariff hikes in telecom.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Economic Times
10 minutes ago
- Economic Times
Stock Market LIVE Updates: Sensex trades flat, Nifty over 25,450; DRL falls 2%, Kotak Bank gains 4%
Sensex Today | Stock Market LIVE Updates: Eight of the 13 major sectors advanced marginally at the open. The broader small-caps and mid-caps traded flat. Nifty Bank and Metal indices advanced in early trade on Tuesday, while IT, FMCG, and Oil & Gas also opened in the green. In the broader market, both the Nifty Smallcap100 and Midcap100 indices saw modest gains. The Indian market closed flat on Monday, with gains in consumer and oil & gas stocks offset by declines in financial and IT shares. Investor sentiment stayed cautious amid growing uncertainty ahead of the July 9 U.S. tariff deadline. Uncertainty over U.S. trade policies weighed on investors sentiment in the Indian stock market. Sensex Today | Stock Market LIVE Updates: Key benchmark indices Sensex and Nifty50 traded on a flat note Tuesday, as investors remained cautious amid global uncertainty following U.S. President Donald Trump's announcement of steep import tariffs on key trading partners. Sensex Today | Stock Market LIVE Updates: Meghna Infracon shares rise on Rs 37 cr redevelopment project in Mumbai Meghna Infracon has signed a Rs 37 crore agreement with Jose Ville for a residential redevelopment project in Santacruz West, Mumbai. The 28,000 sq. ft. project is expected to launch in 2025 and is strategically located near key amenities and transit points. Sensex Today | Adani Power completes 600 MW Vidarbha Power acquisition, operating capacity reaches 18,150 MW Sensex Today | Stock Market LIVE Updates: Kotak Mahindra Bank jumps 4% after Q1 business update signals steady growth Kotak Mahindra Bank shares surged over 4% on Tuesday, hitting an intraday high of Rs 2,237.35 on the BSE, after the lender posted a steady business update for the June quarter (Q1FY26), signalling continued growth momentum. Read more Stock Market LIVE Updates: Indian bonds trade flat despite rise in US yields; await local cues Indian government bonds moved in a tight range on Tuesday morning, largely ignoring the uptick in U.S. Treasury yields. Traders are awaiting a strong domestic trigger to drive further movement. The 10-year benchmark yield stood at 6.2943% as of 9:45 a.m. IST, marginally higher from Monday's close of 6.2933%. Stock Market LIVE Updates: Textile stocks rally up to 8% as US imposes steep tariff on Bangladesh imports Textile stocks surged on Tuesday, with shares of Gokaldas Exports, KPR Mill, Vardhman Textiles, and Arvind Ltd rallying up to 8.2% intraday. The sharp gains came after the US, under President Donald Trump, imposed a 35% tariff on imports from Bangladesh, targeting the apparel and textile sector specifically. Read more Sensex Today | Stock Market LIVE Updates: AMC stocks climb up to 3.5% as SEBI proposes relaxation in mutual fund norms Shares of asset management companies like HDFC AMC, Aditya Birla Sun Life AMC, and Nippon Life India AMC gained as much as 3.5% on Tuesday after SEBI proposed easing regulatory norms for mutual fund business operations. Read more Sensex Today | Stock Market LIVE Updates:J&K Bank shares rise 3% as ace investor Mukul Agrawal picks up 1.3% stake in Q1FY25 Shares of Jammu & Kashmir Bank jumped 3.3% to hit a high of Rs 114.95 on the BSE on Tuesday after renowned investor Mukul Mahavir Agrawal acquired a 1.27% stake—around 1.4 crore shares—in the June 2024 quarter, adding the lender to his portfolio. Read more Sensex Today | Stock Market LIVE Updates: Titan tumbles 5% after Q1 business update fails to impress D-Street Titan shares dropped 4.8% to an intraday low of Rs 3,490.95 on Tuesday after its Q1FY26 business. While the lifestyle major posted 20% YoY growth in its consumer business, the market reacted negatively to the overall performance. Read more Sensex Today | Stock Market LIVE Updates: Rupee rises 23 paise to 85.71 against US dollar in early trade Sensex Today | Stock Market LIVE Updates | Opening Bell: Sensex drops over 50 pts, Nifty below 25,500; DRL falls 2%, Kotak Bank gains 4% Stock Market LIVE Updates: Sensex slips over 100 pts in pre-open session, Nifty tests 25,450 Sensex Today | Stock Market LIVE Updates: HDFC Bank backs ₹532 crore Adani SPV bond issue with anchor investment HDFC Bank has emerged as both the arranger and anchor investor in a ₹532 crore unsecured NCD issue by Adani Energy Solutions' SPV, WRSS XXI (A) Transco. The bank has committed ₹159.6 crore in the long-tenor bonds, which carry a 7.70% coupon and mature in March 2043. The issue has AAA ratings from Crisil and ICRA. Read more Sensex Today | Stock Market LIVE Updates: Nifty 50 Q1 earnings seen up 4.6% YoY amid uneven sector performance Nifty 50 companies are projected to post a 4.6% year-on-year rise in net profit and a 4.5% uptick in revenue for Q1FY26. This would mark the first single-digit profit growth in nine quarters, with weak showings expected from names like Tata Motors, IndusInd Bank, and Coal India. Read more Sensex Today | Stock Market LIVE Updates: Samsung warns of 56% Q2 profit slump, cites US curbs on AI chip sales to China Samsung Electronics expects a sharper-than-anticipated 56% drop in Q2 operating profit, attributing the slide to U.S. restrictions on advanced AI chip exports to China. Analysts also pointed to delays in delivering high-bandwidth memory (HBM) chips to major client Nvidia as a key factor behind the miss. Sensex Today | Stock Market LIVE Updates: J&K Bank shares in spotlight as Mukul Agrawal picks up 1.3% stake in Q1 Shares of Jammu & Kashmir Bank are set to be in focus after ace investor Mukul Mahavir Agrawal acquired a 1.27% stake — around 1.4 crore shares — in the June 2024 quarter. The bank also posted a solid Q1FY26 business update, reporting a 9.5% year-on-year rise in total business to ₹2.49 lakh crore. Sensex Today | Stock Market LIVE Updates: Sebi to tighten surveillance to curb derivatives market misuse Sebi plans to strengthen its surveillance mechanisms to curb manipulation in the derivatives segment, chairman Tuhin Kanta Pandey said on Monday. The move follows the regulator's action against US-based Jane Street for allegedly using large derivative positions to distort indices and book unlawful gains. Read more Sensex Today | Stock Market LIVE Updates: Mphasis, Pfizer among 7 stocks to trade ex-dividend on Wednesday Shares of companies including Mphasis and Pfizer will trade ex-dividend on Wednesday, July 10. This marks the final day for investors to buy these stocks to be eligible for the announced dividends, with July 9 set as the official record date by the respective boards. Read more Sensex Today | Stock Market LIVE Updates: Glen Industries IPO opens today: GMP, price band, key details Glen Industries' IPO opens for subscription on July 8, aiming to raise Rs 63.02 crore via a fresh issue of 64.96 lakh equity shares. The BSE SME-bound IPO has set a price band of Rs 92–97 per share. Market buzz remains strong, with a GMP of Rs 25–26, suggesting a 26% premium over the upper band. Read more Sensex Today | Stock Market LIVE Updates: Oil dips as markets weigh US tariffs, OPEC+ supply boost Oil prices edged lower on Tuesday, pulling back after a near 2% surge in the previous session, as traders evaluated the impact of fresh U.S. tariffs and a larger-than-expected production hike by OPEC+ for August. Brent crude slipped 21 cents to $69.37 a barrel, while WTI dropped 24 cents to $67.69. Read more Sensex Today | Stock Market LIVE Updates: Gold steady as Trump's tariff shock offsets pressure from rising yields Gold prices held firm on Tuesday after U.S. President Donald Trump unveiled steep new import tariffs from Japan, South Korea, and other nations. However, gains were limited as rising U.S. Treasury yields weighed on investor appetite. Spot gold slipped 0.1% to $3,331.89 per ounce, while U.S. gold futures remained flat at $3,341.80. Read more Sensex Today | Stock Market LIVE Updates: Wall Street slides on tariff shock; Musk's political move weighs on Tesla U.S. markets closed sharply lower Monday as investor sentiment took a hit from President Donald Trump's announcement of steep tariffs on Japan, South Korea, and other key trade partners. Adding to the pressure, Tesla shares tumbled after CEO Elon Musk revealed plans to launch a new political party in the U.S., raising fresh uncertainty around the EV giant. Read more Sensex Today | Stock Market LIVE Updates: Titan in focus after Q1 update; consumer biz grows 20% YoY Titan Company shares will be on investors' radar on Tuesday after the firm reported a 20% year-on-year growth in its consumer business for Q1FY26. Its domestic jewellery segment rose 18% YoY despite muted consumer sentiment due to volatile gold prices. Sensex Today | Stock Market LIVE Updates: Yen slips to 2-week low as Trump slaps 25% tariffs on Japan, Korea The yen weakened sharply on Tuesday, sliding to a two-week low of 146.44 against the dollar, after former U.S. President Donald Trump announced 25% tariffs on imports from Japan and South Korea. Meanwhile, the Korean won edged higher by 0.4% to 1370.20 per dollar, though sentiment remained cautious across the region. Sensex Today | Stock Market LIVE Updates: FOREX news The euro rose 0.3% to $1.1747 The Japanese yen was little changed at 145.95 per dollar The offshore yuan was little changed at 7.1740 per dollar Sensex Today | Stock Market LIVE Updates: Global market update S&P 500 futures were little changed as of 9:53 a.m. Tokyo time Japan's Topix rose 0.2% Australia's S&P/ASX 200 was little changed Euro Stoxx 50 futures fell 0.1% Global Market LIVE Updates: Asian shares edge up as Trump open to tariff talks Asian markets edged higher after President Trump signaled the possibility of further negotiations, even as new tariff rates were imposed on countries like Japan and South Korea. The MSCI Asia-Pacific index recorded a mild gain, with Japanese and South Korean stocks leading the advance. Sensex Today | Stock Market LIVE Updates: Stocks in news: Titan, J&K Bank, Tata Motors, M&M, JSW Infra In today's session, stocks such as Titan, J&K Bank, Tata Motors, M&M, and JSW Infra will be in focus amid key news developments and the release of their first-quarter results. GIFT Nifty LIVE Updates: GIFT Nifty (Earlier SGX Nifty) signals a muted start GIFT Nifty on the NSE IX traded lower by 2.50 points, or 0.01 per cent, at 25,513.50, signaling that Dalal Street was headed for muted start on Tuesday. Sensex Today | Stock Market LIVE Updates: Sensex, Nifty on Monday Indian benchmark indices, Sensex and Nifty, ended flat on Monday as gains in consumer and oil & gas stocks were offset by declines in financial and IT shares. Investor sentiment stayed cautious amid growing uncertainty surrounding the July 9 U.S. tariff deadline. Sensex Today | Stock Market LIVE Updates: Ahead of Market: 10 things that will decide stock market action on Tuesday Indian markets ended flat on Monday, with gains in consumer and oil & gas sectors neutralized by losses in financial and IT stocks. Investor sentiment remained subdued amid increasing uncertainty ahead of the July 9 U.S. tariff deadline. Read more


Hindustan Times
20 minutes ago
- Hindustan Times
Two booked for ₹17 crore tax fraud; ran shell firms in Prayagraj
Two individuals have been accused of tax fraud to the tune of ₹17 crore in Prayagraj, police said. Allegedly, the duo ran shell companies and submitted fake electricity bills with their GST registration documents. (For representation) The fraud came to light when the firms' financial records were being checked by SGST officials last week. The accused men–Vishal Kumar Jaiswal and Mohammad Mohsin–were booked for fraud in separate cases registered in Naini and Jhunsi police stations on Monday, officials added. SGST assistant commissioner Rajendra Singh Yadav had lodged the complaint against Jaiswal, the proprietor of Vikas Enterprises located in Naini. According to the FIR, Vikas had claimed in his GST documents dated July 30, 2024, that his company dealt in hardware, steel and iron trade. Vikas showed an outward supply of ₹6,982.67 lakh through the bill. During their probe, SGST officials found that no such firm existed at the mentioned address. It was found that the electricity bill submitted was forged. Jaiswal received an Input Tax Credit (ITC) of ₹1,254.47 lakh or 12.54 crore without transporting the goods, the FIR stated Similarly, a case was registered in the Jhunsi police station against one Mohammad Mohsin alias Mohammad, the owner of Mohammad Enterprises that was in the scrap business. Mohsin, in his GST papers in December 2024, had shown a turnover of ₹1,690 lakh in 2024-25 and ₹884 lakh in 2025-26. However, the firm was later found to be a shell company. Mohsin's PAN card identified him as Mohammed Mardan. His electricity bill was also found to be fake. His firm had cheated the government of Rs. 4.88 crore in taxes, the FIR stated.

Economic Times
21 minutes ago
- Economic Times
Titan shares give Rs 900 crore shock to Jhunjhunwalas. What brokerages say on Tata's bluechip stock
Titan Company shares crashed 5.5% on Tuesday, wiping out around Rs 900 crore from the billionaire Jhunjhunwala family's portfolio, after the jewellery giant's Q1 business update fell short of Street expectations in a quarter marked by gold price volatility. ADVERTISEMENT The Jhunjhunwala family holds a 5.15% stake in the Tata Group company. The selloff comes just days after another high-PE Tata stock, Trent, disappointed investors with lower-than-expected revenue growth, reigniting concerns about premium valuations in the consumer space. The damage was most pronounced in Titan's core jewellery business, where domestic revenue growth of just 18% year-on-year fell significantly short of Street estimates of 22–23%. The company's flagship brands—Tanishq, Mia, and Zoya—posted even weaker growth of 17%, excluding bullion sales. 'Q1 Tanishq, Mia & Zoya business revenue (ex-bullion) up 17% YoY vs est. of 28% YoY,' Morgan Stanley noted in a research report. While the brokerage maintained its Overweight rating on the stock, it flagged the sharp miss in jewellery segment performance. Also Read | Titan shares tumble 5% after Q1 business update fails to impress D-Street The brokerage set a target price of Rs 3,876, citing gold price volatility as a key factor that led to softer consumer purchases between May and prices surged approximately 35% in Q1FY26, with a steep 15% spike within the quarter itself, creating a perfect storm for jewellery retailers. The volatility particularly impacted consumer behaviour between May and mid-June, leading to a slowdown in purchases despite some traction during the Akshaya Tritiya period. ADVERTISEMENT "In the high gold rate scenario, customers preferred lightweight and lower karatage jewellery," the company said, noting that buyer growth remained flat year-on-year for both its premium TMZ brands and its online platform, CaratLane. ADVERTISEMENT CLSA maintained an Outperform rating with a target price of Rs 4,326, acknowledging that while the consumer business grew 20% year-on-year—below estimates—the overall sales performance was resilient given the exceptional gold price surge and geopolitical tensions during the quarter. However, Emkay Global turned bearish, maintaining a Reduce rating with a target price of Rs 3,350. ADVERTISEMENT "Given the risk to estimates, increasing competition, mushrooming LGD players, and a deteriorating RoIC profile, we maintain 'Reduce' on Titan with a target price of Rs 3,350 (50x Jun-27E EPS)," the brokerage stated. JM Financial expects jewellery EBIT margin to compress to 11% (ex-bullion sales), down roughly 20 basis points year-on-year, and projects standalone EBITDA/PAT growth of 20%/19% YoY. The pressure on high-margin studded jewellery sales—which grew only in low double digits—further weighed on margins. "With low footfalls at stores, the high-margin studded sales are also under pressure, which typically see better traction during periods of rising gold prices," Emkay added. ADVERTISEMENT Beyond gold price volatility, Titan is facing growing competitive pressure with the entry of new players like Indriya in select markets, along with expansion by existing rivals. The company is responding by narrowing the gap in gold pricing and making charges versus competitors, while also pushing gold exchange programs and monthly instalment schemes to sustain domestic growth for Tanishq, Mia, and Zoya remained in the low double digits, driven entirely by an increase in average ticket size rather than new customer additions. The company added 19 new stores in India during the quarter—3 under Tanishq, 7 under Mia, and 9 through CaratLane. The steep decline in Titan shares underscores the vulnerability of high-PE consumer stocks to earnings disappointments, especially as investors begin to reassess premium valuations amid a challenging operating environment.