Jefferies Hikes RIL's Target Price After Noting Improved Earnings — Check Upside Potential, Business Outlook

Jefferies retained Buy rating on Reliance Industries Ltd. and hiked the target price to Rs 1,785 from Rs 1,780 apiece. The current target price implies an upside potential of 16% from Thursday's close price.

The stock is still trading below mean long-term enterprise value and Ebitda, which is keeping the risk-reward ratio of Reliance Industries favourable, Jefferies said.

Reliance Industries reported an improvement in earnings growth as all three businesses of the oil-to-telecom major reporting double-digit growth in financial year 2026 so far.

Jefferies forecasted a mid-teens revenue growth by financial year 2027 as 6–7% area growth will support along with same-store-sales growth of Jio Mart and Reliance Retail.

Strong festive demand will help Reliance Retail report double-digit revenue growth for the second consecutive quarter in October–December. Jio Mart has seen a 200% surge in daily orders as it accelerated the roll-out of dark stores in metros and speed of order fulfilment, according to Jefferies.

Reliance Industries' FMCG business has been growing at a rate of 100% year-on-year for the past six quarters on the back of aggressive distribution expansion in the general trade reach more than 10 lakh outlets, contributing 75% of revenue. In the Campa Cola segment, its FMCG business is ramping private label expansion, the brokerage said.

Its FMCG business has become larger than competitors like Tata Consumer Products Ltd., Godrej Consumer Products Ltd., Britannia Industries Ltd., and Dabur India Ltd. with revenue run rate of $2.4 billion across staples, beverages, beauty, and home care, Jefferies said.

Jefferies is expecting a potential for value discovery in financial year 2027 and 2028 with the demerger from Retail Business.

Reliance Industries' oil-to-chemical business is clocking 14% year-on-year growth on the back of supply tightness leading to strength in auto fuels, Jefferies said.