By Aditya Raghunath
Fintech Zoom — Global brokerage firm Goldman Sachs (NYSE🙂 has said that the next big driver for Reliance Industries Ltd (NS:) is going to be its retail business. Retailers in India have taken a beating for over 15 months after the pandemic hit India in 2020.
However, Goldman Sachs believes that it’s going to change in the near future. “We believe retail business (including e-commerce) is set to be the next growth engine for RIL, with potential for retail EBITDA to grow 10x over the next 10 years,” the brokerage firm said in a note on Monday.
Goldman Sachs says that India’s organized grocery food retail is going to increase six-fold in the next 10 years, and Reliance Retail is going to take an incremental 15% share in it taking its total market share to over 55%. This includes Reliance’s takeover of Future Group stores that currently puts its market share at 41.5%
“We value RIL retail business at $88 billion in our base case with our offline business valuation similar to comps and online business valuation at the high end of the peer group given higher GMV growth,” said Goldman Sachs. Its bull case for Reliance Retail is $120 billion.
It says private labels and expansion into tier II and III towns will boost its market share. Reliance Industries shares closed at Rs 2,238.95, its highest level in six months.