Shares of Reliance Industries (RIL) may rise as a lot as 12 % from present ranges, Citi Analysis mentioned in a current notice, reiterating its ‘purchase’ name on the Nifty 50 heavyweight. The brokerage assigned a goal value of ₹1,585, citing six potential catalysts throughout the conglomerate’s core enterprise segments that might drive the inventory increased within the close to time period.
At present ranges, the goal implies an upside of 12 % for India’s most precious firm. Based on Citi, a mixture of operational restoration, structural shifts, and anticipated bulletins may help investor sentiment and inventory efficiency over the approaching months.
Inventory Worth Pattern
Reliance Industries’ share value remained largely unchanged over the previous yr, gaining simply 1 %. In Might up to now, the inventory edged up 1.2 %, constructing on an over 10 % rally in April and a 6 % rise in March. This adopted a 5 % decline in February, whereas in January, the inventory had added 4 %.
At present ranges, the inventory was buying and selling 12 % under its report excessive of ₹1,608.95, touched in July 2024. Nevertheless, it has rebounded 27 % from its 52-week low of ₹1,115.55, hit in April 2025.
Funding Rationale
Oil-to-Chemical substances Enterprise Restoration: Citi highlighted an bettering outlook for RIL’s Oil-to-Chemical substances (O2C) phase, pushed by strengthening refining margins, rising home gas retail margins, and modest positive aspects in petrochemical spreads. The brokerage famous that Singapore gross refining margins (GRMs) had rebounded above $6 per barrel, in comparison with a two-quarter common of round $4, largely as a consequence of provide disruptions in Nigeria and decrease diesel exports from China.
Citi additionally expects stronger home gas retailing margins so as to add over $1 per barrel at present spot ranges, practically double the FY25 common. Moreover, falling enter prices have supported a gentle restoration in petrochemical spreads.
Beneficial YoY Comparisons in Q1FY26: The agency expects base results to play in RIL’s favour within the June quarter of FY26, particularly given the weak efficiency in the identical quarter final yr. The Q1FY25 interval had seen sluggish efficiency throughout O2C, Retail, and Jio, making for a low comparability base. Citi believes this might lead to a powerful year-on-year rebound in earnings.
Potential AGM Bulletins: Citi flagged Reliance’s upcoming Annual Normal Assembly (AGM) as one other potential set off. The brokerage mentioned any updates concerning the timeline for Jio’s itemizing may shift market sentiment positively. Whereas final yr’s AGM had restricted affect, Citi believes readability across the itemizing of Jio Platforms may act as a major re-rating issue.
Retail Phase Revival: RIL’s Retail arm is witnessing indicators of restoration after a muted first half of FY25, which was marked by retailer rationalisation. Based on Citi, the grocery phase continues to carry out strongly, delivering double-digit like-for-like (LFL) development throughout each city and metro markets.
The brokerage initiatives that RIL’s total Retail income will develop at a compound annual development charge (CAGR) of 15 % over the subsequent two to a few years, sharply increased than the 7 % development recorded in FY25.
5G Monetisation Potential: Citi sees upside from Jio’s massive 5G consumer base, which at the moment constitutes about 40 % of its cell subscriber base—or 191 million customers. Notably, round 45 % of complete cell information site visitors is already on the 5G community.
Nevertheless, this capability stays largely unmonetised. Citi believes managemen
t will quickly flip its focus towards producing income from the 5G rollout, which may add a brand new layer of profitability to Jio’s telecom enterprise.
Capex and Web Debt Administration: Lastly, the brokerage famous that Reliance’s capital expenditure and internet debt remained comparatively secure over FY24 and FY25. If this pattern continues, Citi expects a gradual discount in total capex depth and internet debt ranges—particularly within the Jio phase—resulting in improved steadiness sheet energy.
Valuation and Dangers
Citi’s ₹1,585 value goal is predicated on a sum-of-the-parts (SOTP) valuation mannequin. It assigns ₹375 per share to the O2C enterprise, ₹523 to Jio, and ₹623 to the Retail phase. Different parts embrace ₹25 for the corporate’s exploration and manufacturing (E&P) belongings, ₹51 for brand spanking new power investments, and ₹75 for different companies. These are adjusted for ₹75 per share in internet debt.
Nevertheless, Citi flagged a number of dangers that might affect its bullish outlook. These embrace a possible weakening in refining margins, reintroduction of windfall taxes, restricted progress in new power initiatives, rising non-core investments, and the danger of a holding firm low cost.
Disclaimer: The views and proposals made above are these of particular person analysts or broking corporations, and never of Mint. We advise buyers to test with licensed specialists earlier than making any funding selections.
