Reliance Industries stock up nearly 4% on Macquarie, Emkay upgrade

In the past six months, RIL share price has underperformed the market by falling 15 per cent as compared to a 9 per cent decline in the BSE Sensex

Reliance Industries (RIL) stock jumped 3.18 per cent to ₹1,249 on the BSE on Friday after various brokerages upgraded it with a target price (TP) of up to ₹1,600 per share. The country’s most valued listed company was the biggest gainer among the Sensex stocks, while the benchmark ended the day marginally down. 

 

RIL share is quoting higher for the third straight trading day, gaining 7.5 per cent during the period. The stock had hit a 52-week low of ₹1,156 on Monday, March 3, 2025. In the past six months, Reliance share has underperformed the market by falling 14.7 per cent as compared to 8.4 per cent decline in the BSE Sensex.

 

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Global brokerage Macquarie has upgraded RIL to 'outperform' with a share price target of ₹1,500 per share. According to the brokerage firm, RIL's share price has underperformed MSCI India by 18 percentage points (PP) and Bharti Airtel by 60 PP over the past year. 

 

"We, however, are upgrading the stock now, noting a series of incremental positives over the next 6-12 months. Looking ahead, relative to a mere 2 per cent earning per share (EPS) compounded annual growth rate (CAGR) in FY23-25, we estimate 15-16 per cent EPS CAGR in FY25-27. The key catalysts include better earnings momentum, Jio Platform's potential listing, and gradual commissioning of new energy capacities," it said in a note. 

 

Analysts at Kotak Institutional Equities believe subdued retail demand was the key reason for the weak performance of RIL stock. Going ahead, they expect the store-rationalisation cycle to end soon. However, increased sanctions on Russia and repercussions of reciprocal tariffs by the US weaken the refining outlook.

 

"With a significant correction in RIL stock price, the risk-reward is more favorable. The retail business will likely improve in the next few quarters. News flows on telecom business' initial public offering (IPO) timelines (and likely another tariff hike before that) can be a catalyst," the analysts at the brokerage said, as they upgraded RIL to 'buy' from 'add' with a share price target of ₹1,400 (₹1,435 earlier).

 

"We have moderated our FY2026-27 operating profit estimate by 1-3 per cent, driven by a lower gross refining margin (GRM) assumption (partially offset by higher petchem), a one-quarter delay in telecom tariffs and marginally lower retail estimates. Despite the moderation, we expect a consolidated EPS CAGR of 11 per cent over FY2024-27," analysts said in a stock update report.

 

Global brokerage Jefferies, too, has assigned a 'buy' rating on the RIL stock with a target price of ₹1,600 in a base care scenario, citing a potential recovery in the company's retail business and a likely tariff hike in its telecom unit. The brokerage firm expects RIL's retail segment growth to recover to 15 per cent in FY26, supported by same-store sales expansion and new store additions.

 

Despite a steady Q3FY25, RIL's stock was affected amid weak market conditions, accentuated by trade war threats. Though the petchem cycle, particularly, can be impacted by the trade wars, it has been muted for quite some time now, according to Emkay Global Financial Services.

 

However, FY25, is slow (2 per cent expected operating profit growth), impacted by oil to chemicals (O2C) segment, declining 10-15 per cent, retail slowing to under 10 per cent from 25-30 per cent in FY24, and upstream normalising from the sharp ramp-ups in earlier years. 

 

Analysts at the brokerage have thus taken a conservative view on businesses carrying some uncertainty, namely Jio (further tariff hikes) and upstream (realisation, profit petroleum), along with adjustments in the 'below operating profit’ line items. It has cut RIL's FY25/26/27 consolidated EPS by 6 per cent/13 per cent/11 per cent.

 

"After a phase of network optimisation to remove pandemic/acquisition-led inefficiencies in FY25, retail is now set to retrace its double-digit growth trajectory," it said.