RIL smartly deploying cash war chest to ride AI boom; analysts remain bullish

Meanwhile, at the bourses, in the last one year, RIL stock has outperformed the market by rising nearly 17 per cent compared to the 12 per cent rise in the Nifty 50 index, data shows

Most analysts remain bullish on Reliance Industries (RIL) stock as the company unveiled plans to invest Rs 10 trillion over the next 7 years to build artificial intelligence (AI) infrastructure and services in India. 

  The fall in the stock on Thursday - down over 1.5 per cent to Rs 1,417 levels in intraday dals - they said, was in line with the overall market sentiment that saw the S&P BSE Sensex slip over 1 per cent, or 800 points to hit an intraday low of 82,864.29 levels.

 

"The company is sitting on a war chest of cash, which it is deploying very strategically in the right businesses. One must understand these are long gestation businesses and the results will take time to be visible. The fall seen in the stock on Thursday is in line with the overall market mood. We remain bullish on the stock from a long-term perspective," said Gaurang Shah, head investment strategist at Geojit Investments. 

 

 

On Jio’s plans, RIL chairman Mukesh Ambani said on Thursday that the company plans to build India’s sovereign compute infrastructure through gigawatt-scale data centers. He said construction has already begun on a multi-gigawatt AI infrastructure in Jamnagar. "Over 120 megawatts will come online in the second half of 2026, with a clear path to gigawatt-scale capacity for training," Ambani said. 

 

Meanwhile, at the bourses, in the last year, RIL stock has outperformed the market by rising nearly 17 per cent compared to the 12 per cent rise in the Nifty 50 index, ACE Equity data shows. 

 

RIL, according to G Chokkalingam, founder and head of research at Equinomics Research, has a proven track record of building businesses at a huge scale, and the Rs 10 trillion investment in AI, too, is a step in the right direction at the right time.

 

"I don't think the company is spreading itself too thin. It has the capability of handling projects of such scale. The recent forays, be it in fast-moving consumer goods (FMCG), telecom, retail and finance (via Jio), are on a stable footing. The stock on Thursday may have reacted to the overall risk-off mood given geopolitical developments," he said.

 

According to reports, the mega-data-centre in Jamnagar, Gujarat is designed to support OpenAI and Meta models internally, keeping data in India and providing ultra-low-cost AI inference.  

 

RIL’s strength, said analysts at Nuvama, lie in its ability to build businesses of global scale and execute complex, time-critical and capital-intensive projects. "These strengths shall prove advantageous as the company embarks on large investments in all segments," they said in a recent note while maintaining a buy rating on the stock with a price target of Rs 1,808 - up around 27 per cent from the current levels.

 

Those at Nomura, too, maintained a buy rating on the stock with a price target of Rs 1,700 levels, up around 20 per cent from the current levels. 

"With the first phase of solar module and cell manufacturing already operational, we expect Reliance New Energy to ramp up its fully integrated solar module manufacturing capacity to 20GW by FY30F. We reiterate our Buy rating for RIL and see two near-term catalysts: scale-up of the new energy business and a potential IPO for Jio by 1HFY26," wrote Bineet Banka of Nomura in a recent note.