Reliance Infrastructure
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Reliance Infrastructure is strategically pivoting towards high-growth sectors such as defence manufacturing and renewable energy, as highlighted by management's focus on resilience and long-term value creation. This transition is crucial for revenue growth, especially as the company navigates significant regulatory challenges related to its power distribution business, which could impact margins and overall financial health. Vista's financial outlook reflects an early recovery in revenue, although margins are expected to remain under pressure due to these ongoing legal uncertainties. The attractive valuation relative to Vista's intrinsic value estimate, with an expected upside of over 80%, supports a strong buy recommendation. However, the company's future performance will depend on the successful execution of its strategic initiatives and the resolution of regulatory disputes. In the broader context, while the macro environment shows mixed signals, the focus on government capex and improving economic indicators provides a supportive backdrop for infrastructure investments. Over the next 12-24 months, key opportunities include the expansion into defence and renewable sectors, while watchpoints include regulatory risks and margin pressures from inflationary trends
Why We Like This Stock
- Strategic focus on high-growth sectors like defence manufacturing and renewable energy
- Early recovery in revenue growth following a period of contraction
- Attractive valuation with significant expected upside relative to intrinsic value
Things To Watch Out For
- Ongoing legal and regulatory uncertainties surrounding the liquidation of substantial regulatory assets
- Expected margin pressures due to inflation and regulatory challenges
- Dependence on successful execution of strategic initiatives for future growth
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 22,805 | 24,441 | 20,441 | 21,658 | 23,261 |
| Profit Before Tax (Cr.) | -494 | 7,386 | 3,263 | 4,091 | 4,224 |
| PBT Margin | -2.2% | 30.2% | 16.0% | 18.9% | 18.2% |
| Net Profit (Cr.) | -1,024 | 8,064 | 3,169 | 3,068 | 1,901 |
| Earnings Per Share | -36.3 | 93.6 | 30.1 | 45.0 | 46.5 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
Show Company Profile
Reliance Infrastructure Limited, an infrastructure company, generates, transmits, and distributes electrical power to residential, industrial, commercial, and other consumers in India. It operates through three segments: Power; Engineering and Construction (E&C); and Infrastructure. The Power segment engages in the trading of power. Its E&C segment offers value added services in construction, erection, commissioning, and contracting. The Infrastructure segment is involved in the development, operation, and maintenance of toll roads, metro rail transit system, and airports. It also engages in the exploration and production of 4 coal bed methane blocks covering an area of 3,266 square kilometers in Madhya Pradesh, Andhra Pradesh, and Rajasthan, and rehabilitation and upgradation of NH-66. In addition, the company is involved in the operation of toll road and metro rail concessions and urban transport systems; operation and maintenance of airports and power stations and power trading; trade tower and business district construction; sale and purchase of electricity from exchanges, bilateral, and barter system; engineering and construction; realty; renewable energy; cell, module, wafers, and ingot manufacturing; project management; battery storage; manufacture of defense systems; electric and electronic products; EV and battery business; telecom and transmission business; and IT business. Reliance Infrastructure Limited was incorporated in 1929 and is based in Mumbai, India.