Shares of Reliance Industries Limited (RIL) climbed over 2% on Wednesday, signaling a renewed sense of optimism among investors, following a favorable analysis from global brokerage firm Jefferies. The firm reaffirmed its 'BUY' rating on the stock and set a target price of Rs 1,690, projecting a potential upside of over 30% from the current price levels. At 3:26 pm on the Bombay Stock Exchange (BSE), RIL shares were trading 1.81% higher at Rs 1,263.30, which still remains significantly below the firm’s target price. If the target price is realized, it would translate into an impressive 33% upside potential, marking RIL as an attractive investment opportunity in the Indian stock market.
Jefferies noted that while concerns about medium-term growth in Reliance’s retail business and weaker earnings projections for FY25 have historically impacted the stock’s performance, the brokerage now sees a brighter outlook. The firm highlighted that the retail segment is poised for mid-teens growth, and it expects significant improvements in Reliance’s oil-to-chemicals (O2C) business by FY26. Jefferies also pointed out that the potential listing of Reliance Jio could become another major growth driver for the conglomerate, contributing to an overall positive shift in the company’s fortunes.
With the added optimism surrounding RIL's recovery, Jefferies forecasted a 14% growth in Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for FY26, driven by contributions from all segments of the company. This growth could be vital for RIL’s performance as it continues to diversify its business operations, ranging from telecom to retail and energy sectors. The brokerage further emphasized that RIL’s current valuations are the most attractive they’ve been since March 2020, positioning the company as a solid pick for investors seeking long-term returns in a fluctuating market.
Similarly, another global brokerage, Bernstein, has retained its 'Outperform' rating on Reliance Industries with a target price of Rs 1,520, implying a 25% potential upside from current levels. Bernstein expressed confidence that 2025 will be a recovery year for RIL, driven by a projected 12% increase in Reliance Jio’s Average Revenue Per User (ARPU), even in the absence of tariff hikes. The retail segment, according to Bernstein, is expected to return to double-digit EBITDA growth, while refining margins are expected to improve, further boosting the conglomerate's overall financial performance.
Market sentiment around RIL remains positive, with the stock’s 52-week high now 22% below its current level, making it an increasingly attractive prospect for investors looking for growth at a discounted price. Out of the 39 analysts covering RIL, 33 analysts have assigned a 'Buy' rating, three have recommended a 'Hold,' and only three have suggested a 'Sell.' Notably, Mirae Asset Securities has the highest price target for the stock at Rs 1,950, signaling a potential upside of 57%, which further reinforces the positive outlook surrounding the company.
In addition to its diversified business segments, Reliance Industries is increasingly seen as a key player in India's telecom and energy sectors, with Jio's performance expected to continue driving its revenue growth. The potential listing of Jio is expected to unlock additional value for shareholders, while the O2C business is likely to benefit from improved refining margins. Jefferies and Bernstein both expect RIL to be in a strong position to recover in the coming years, underpinned by strategic growth initiatives, including potential expansion in retail, telecom, and energy markets.
With multiple factors driving investor optimism, including robust performance expectations across all business segments, RIL could offer significant returns for investors willing to hold the stock for the long term. Major brokerages expressing confidence in RIL’s recovery prospects suggest that this could be a strategic moment for investors to accumulate shares in the company. As one of India’s largest and most diversified conglomerates, RIL continues to be an important player in the Indian stock market, with the potential to outperform expectations in the years ahead.
