Reliance Industries (RIL) stock saw a 3% rise on 6 March, reaching a high of ₹1,214 on the BSE before closing at ₹1,210.55. This upward movement came after brokerage firm Kotak Institutional Equities upgraded its rating from “Add” to “Buy” with a target price of ₹1,400 per share, reflecting a 15% potential upside from the closing price.
Another brokerage firm, Jefferies, also maintained a “Buy” rating on RIL, but with a higher target price of ₹1,600 per share, indicating a 32% potential gain from current levels.
Key Factors Behind the Stock Movement
- Retail Business Recovery Expected: RIL’s weak stock performance in recent months was mainly due to a sluggish retail segment. However, Kotak Institutional Equities believes the store rationalization cycle will end soon, leading to improvements.
- Refining Business Concerns: The brokerage noted that increasing sanctions on Russia and reciprocal tariffs from the U.S. could weaken RIL’s refining business outlook. Due to this, Kotak slightly reduced its FY26-27 EBITDA estimate by 1%, now projecting a 3% EBITDA growth.
- Strong Earnings Growth Outlook: Despite minor cuts in earnings estimates, Kotak expects RIL’s earnings to grow at an 11% compound annual growth rate (CAGR) from FY24 to FY27.
Upcoming Triggers for RIL Stock
- Retail Business Revival: The stock, which peaked at ₹1,608.95 on 8 July 2024, has fallen 25% from its high. This decline has made RIL’s risk-reward ratio more attractive, according to Kotak. The brokerage expects retail segment improvement in the coming quarters.
- Telecom Developments: Potential news around Jio IPO timeline and another tariff hike could act as major catalysts for RIL stock.
- O2C Business & Jio Listing: Jefferies also highlighted that improved profitability in the oil-to-chemicals (O2C) segment and Jio’s listing could drive stock gains.
Analyst Ratings on RIL
- Out of 38 analysts covering RIL,
- 34 recommend “Buy”,
- 1 suggests “Hold”,
- 3 have a “Sell” rating.
With upcoming triggers and a strong long-term growth outlook, brokerage firms remain bullish on Reliance Industries stock despite short-term global challenges.
