In addition, the brokerage firm also said that it has removed Interglobe Aviation (IndiGo) and Jubilant Foodworks from its focus list.
The investment bank said the move reflects its preference for big private sector names in the financial, consumer and industrial segments.
“Overall, we recommend major private sector financial, consumer and industrial stocks,” the firm said in its latest update.
Here’s a detailed look from Morgan Stanley on the changes it’s made:
Reliance Industries: AI, green energy in the spotlight
Morgan Stanley has highlighted Reliance Industries’ continued commitment to artificial intelligence and clean energy as critical to its integration. The company expects significant value unlocking and states that RIL is “poised to unlock $50 billion in value through its strategic push into New Energy and AI.” A key part of this strategy involves a multi-gigawatt Gen AI data center using NVIDIA Blackwell chips, co-developed with Google and Meta, backed by an investment target of $15 billion by 2027. Despite its size, the broker believes its valuation potential remains underappreciated. “RIL’s AI potential remains undervalued,” Morgan Stanley noted.
On the energy side, the broker pointed out that “with China exiting a third of global polysilicon capacity, RIL will become South Asia’s only fully integrated 20GW solar chain by 2027, positioning the country as a key non-Chinese beneficiary in the global clean technology reset.”
The note also discusses RIL’s O2C (Oil-to-Chemicals) business and states that “China’s involution is further tightening refining margins, while retail and telecom continue to outperform, driven by FMCG, and fixed wireless network users are improving quality of returns.”
The company’s energy analyst Mayank Maheshwari has valued RIL’s New Energy + AI vertical at $25 billion, up from an earlier estimate of $19 billion. The brokerage also sees a “per share CAGR of 11% in FY28, and sees room for multiple expansions across verticals.”
Varun Beverages: stable track record
Morgan Stanley has also added Varun Beverages Ltd (VBL), citing its ability to scale both domestic and global operations, along with a favorable shift in sentiment from previous concerns.
“VBL has a solid track record of scaling domestic and international opportunities,” the report said.
Morgan Stanley consumer analyst Sheela Rathi notes that “the worst of the seasonality-led growth weakness is over.” The report further notes recent communications from the company indicating no further new market expansion and highlighting entry into the alcobev segment as key to future growth.
Morgan Stanley sees this as “strengthening the case for a stock revaluation.”
Leave Interglobe Aviation and Jubilant Foodworks
To accommodate these additions, Morgan Stanley has removed Interglobe Aviation and Jubilant Foodworks from its focus list. The note provided no additional comment on the reasoning behind these removals.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
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