Reliance Industries Ltd., India's most valuable company, received a share price target hike from multinational investment firm Jefferies given that the stock is trading below long-term average valuations. The firm maintained a 'buy' rating on RIL and placed a fresh target of Rs 1,820 from Rs 1,795 earlier. The new target implies a return potential of 27% over the previous close.
Analysts said RIL has underperformed the benchmark Nifty 50 index by 7% on a year-to-date basis due to weak performance in the retail business in the third quarter. The stock is trading below long-term average from where it has rebounded five times in the past five years. Progress with Jio's IPO, a likely tariff hike, recovery in retail growth and likely value discovery in FMCG are key triggers for an upside, they said in a note.
Add image caption here
Photo Credit: Reliance Industries
Jefferies expects the retail arm to deliver 16% year-on-year revenue growth in the next financial year on the back of high-single digit area growth after two years of consolidation and mid-single digit same store sales growth. Operating margins could dip slightly due to scale up of quick commerce.
The loss of discounted Russian crude due to the US-India trade deal is likely to impact the refining margin by $1 per barrel, they estimate. RIL operates the world's largest refinery complex in Jamnagar and lapped up cheap oil from Russia over the last four years, until it caught the attention of Washington. While Venezuelan oil can partially replace that, the availability and timing of such volume is unclear, the note said.
Reliance share price has risen 12% in the last 12 months. The current market price is down 10% from its all-time peak of Rs 1,600.75 in July 2024.
Out of the 37 analysts tracking RIL, 35 have a 'buy' rating on the stock, and two suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets is Rs 1,716, which implies a potential upside of 19%.
ALSO READ: Five Stocks To Buy: Bharat Forge, Max Healthcare, ONGC And More
Comprehensive Budget 2026 coverage, LIVE TV analysis, Stock Market and Industry reactions, Income Tax changes and Latest News on NDTV Profit.
