Priced: Assa Abloy E500M 7Y MS+85

Priced: Assa Abloy E500M 7Y MS+85

India's Reliance Industries Ltd. (RIL) is poised to benefit significantly from China's push to curb overcapacity, according to a recent analysis by Morgan Stanley. The conglomerate, led by billionaire Mukesh Ambani, is set to gain from both China's anti-involution efforts and its own streamlining initiatives.

China's anti-involution strategy, aimed at reducing cutthroat competition with little payoff, has a direct impact on various industries, including energy and solar supply chains. Reliance is building out a fully integrated solar supply chain in India, which aligns with China's efforts to rationalize its polysilicon production. This could cut Reliance's energy costs by up to 40% by 2030 and boost new-energy earnings contributions to 13% by 2027, Morgan Stanley analysts estimate [1].

The analysts maintain an overweight rating on RIL's stock and have raised their 12-month price target to ₹1,701 from ₹1,602, implying a 26% gain from Monday’s close. This upward revision reflects the potential value addition from China's anti-involution efforts and Reliance's own anti-involution drive across various business segments.

The stock's current valuation of 21 times earnings-based valuation is in line with its five-year average, according to data compiled by Bloomberg. The analysts note that the stock's valuations imply near zero value to new energy and AI investments, with limited upside on FMCG growth. However, the 80% probability of the stock rising in absolute terms over the next 60 days suggests optimism over anti-involution efforts and AI investments [1].

In a separate development, Dormakaba, a Swiss security and access systems provider, is also navigating the impact of U.S. tariffs. The company expects its North American revenue to grow over the next three years, aiming for over 1 billion Swiss francs in revenue by the 2027/28 financial year. Dormakaba intends to offset U.S. import duties through higher pricing, in line with industry practices [2].

References:
[1] https://www.business-standard.com/companies/news/reliance-set-to-get-20-bn-boost-as-china-curbs-price-wars-morgan-stanley-125090200288_1.html
[2] https://www.reuters.com/technology/dormakaba-pass-tariff-costs-customers-it-targets-north-american-growth-2025-09-02/