Synopsis:
Reliance Industries shares are in focus as CITI and Jefferies expect the stock to rise by another 22% and 21% respectively, citing strong growth prospects, recent foray into the healthy beverages segment, efficient cash flows from Jio, and more.
The shares of this leading NIFTY stock, which currently has a weightage of 8.39 percent in NIFTY 50, are back in focus as analysts highlight numerous upticks in the business.
With a market capitalization of Rs 19,10,785 crore, the shares of Reliance Industries Ltd are currently trading at Rs 1,412 per share, representing a decline of 9 percent from its 52-week high of Rs 1,551 per share. Over the past five years, the stock has delivered a positive return of 36 percent.
Analyst Comments
Leading global brokerage CITI has assigned a Buy call on the stock with a target price of Rs 1,690 per share, signaling an upside of 22 percent from its previous day closing price of Rs 1,381.70 per share.
CITI cited that Reliance Industries is witnessing positive investor sentiment driven by SEBI’s recent proposal to cut the minimum public float for mega IPOs in half. This change is viewed as a significant boost for Jio Platforms, especially with its potential $120 billion+ listing, as it helps reduce supply concerns.
On another note, Reliance Consumer Products is making headlines in the booming healthy beverages market by acquiring a majority stake in Naturedge Beverages, the company behind the herbal zero-calorie brand Shunya. This move enhances its product lineup, which already includes Campa Cola, Campa Energy, and Raskik.
Additionally, Jefferies too has assigned a Buy call on the stock with a target price of Rs 1,670 per share, signaling an upside of 21 percent from its previous day closing price of Rs 1,381.70 per share.
Jefferies pointed out that Jio is seeing better cash flows, maintaining steady momentum in retail, and continuing its investments in renewable energy within RIL’s O2C segment.
They observed that capital expenditures remained flat year-over-year, while free cash flow has strengthened, largely thanks to Jio. It added that there’s been a remarkable fivefold increase in Jio’s third-party revenues, along with a growing retail asset base.
The brokerage believes that scaling up Jio’s broadband and enterprise services, expanding FMCG in retail, and ramping up clean energy initiatives are crucial priorities, which further solidify RIL’s investment appeal at the current valuations.
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Financial Highlights
The company’s revenue for Q1 FY26 came in at Rs 2,43,632 crore, registering a 5 percent growth from Rs 2,31,784 crore in the same quarter last year. However, on a sequential basis, revenue declined by 7 percent from Rs 2,61,388 crore in Q4 FY25.
Coming to its profitability, the company reported a net profit growth of 76 percent to Rs 30,783 crore in Q1 FY26 as compared to Rs 17,445 crore in Q1 FY25. Additionally, on a QoQ basis, it grew by 36 percent from Rs 22,611 crore.
However, it is to be noted that higher net profit was mainly aided by a higher other income of Rs 15,119 crore in Q1 FY26, i.e, a growth of 280 percent from its Q1 FY25 other income of Rs 3,983 crore.
The stock delivered an ROE and ROCE of 8.40 percent and 9.69 percent respectively, and is currently trading at a P/E of 25.52x as compared to its industry average of 19x.
Written by Satyajeet Mukherjee
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