Reliance Gets Upgrades As Analysts See 'Favourable Catalysts' Lifting Stock

Shares of Mukesh Ambani-led conglomerate Reliance Industries Ltd. rose after receiving multiple rating upgrades and target price hikes, as analysts see no threats to macro going ahead.

Despite steady quarterly results, the stock was still affected by weak market conditions, accentuated by trade war threats, Emkay said in a note. The brokerage maintained 'buy' on the stock, while raising the target to Rs 1,450 per share, from Rs 1,210 earlier.

Emkay sees gradual margin gains in the retail unit with network optimisation, productivity enhancement, and leveraging of existing infra more than offsetting the growth investments in nascent businesses.

The brokerage built in a conservative stance on Jio with a reduction in average revenue per user assumptions. Emkay also trimmed their oil-to-chemicals estimates.

Macquarie upgraded the stock to 'outperform' from 'neutral' and raised the target price to Rs 1,500 apiece from Rs 1,300. The upgrade reflects a series of incremental positives expected over the next six to 12 months, it said.

Key catalysts include improved earnings momentum, a potential listing of Jio Platforms, and the gradual commissioning of new energy capacities, Macquarie said.

While visibility is low for Reliance Retail, analysts at the brokerage firm noted that the company's commentary suggests a turnaround from the low single-digit core segmental revenue growth in fiscal 2025 to over 15%. "We don't see a further margin expansion as we build in higher revenue share in the lower-margin grocery segment."

RIL's shares rose as much as 1.7% to Rs 1,230 apiece on the NSE during the session. It pared gains to trade 1.6% higher at Rs 1,225 apiece, as of 10:02 a.m. This compares to a 0.04% advance in the benchmark Nifty 50.

The stock has fallen 16.83% in the last 12 months. Total traded volume so far in the day stood at 10 times its 30-day average. The relative strength index was at 40.

Out of 38 analysts tracking the company, 35 maintain a 'buy' rating, and three suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 26%.