Reliance share price jumps 18% YTD, outperforms Nifty 50; Jefferies, JP Morgan, Bernstein see more upside
Reliance Industries' share price appears poised for healthy long-term gains, as top global brokerage firms believe the stock's attractive valuation and strong growth outlook leave room for a potential re-rating.
Reliance share price has jumped 18 per cent year-to-date (YTD), compared to a 5 per cent gain in the equity benchmark Nifty 50.
Despite recent outperformance, Reliance share price has declined nearly 2 per cent, while the Nifty 50 has climbed 7.5 per cent over the last year.
The stock hit a 52-week low of ₹ 1,114.85 on April 7 this year after it scaled a 52-week high of ₹ 1,608.80 on July 8 last year.
On a monthly scale, the stock has been in the green since March this year, climbing nearly 2 per cent in June so far.
Global brokerage firm Jefferies has a buy call on the stock with a target price of ₹ 1,650.
Jefferies underscored that Reliance's FY26E growth visibility is improving with space addition in retail, constructive tariff outlook in Jio, and strong showing in O2C in Q1. The stock trades below the mean on long-term forward EV/EBITDA, suggesting room for re-rating, said Jefferies.
Similarly, JP Morgan has an "overweight" rating on the stock with a target price of ₹ 1,568.
JP Morgan said Reliance retail and telecom accounted for nearly 54 per cent of total FY25 consolidated EBITDA. The global financial firm believes these will account for almost all of the net EBITDA growth over the next three years.
"RIL has operated at material negative FCF (free cash flow) for the last three years, driven by spending in telecom. As that fades, with an EBITDA run-rate of nearly $20 billion a year, we expect Reliance to deliver positive free cash flow despite elevated capex plans at the New Energy complex and in the retail business, and towards petrochemical capacity expansions. Recent company guidance of maintaining net debt to EBITDA of less than one time also implies positive FCF generation," JP Morgan said.
Bernstein has an "outperform" view on the stock with a target price of ₹ 1,640. It sees Reliance's growth momentum strengthening as store rationalisation nearing completion, continued tariff repair, and scale-up in the new energy segment.
"We believe the improving growth outlook, combined with supportive valuations, sets the stage for a potential stock re-rating. Additionally, Reliance continues to demonstrate strong balance-sheet discipline, with capex moderating and net debt to EBITDA remaining flat in FY25," said Bernstein.
Reliance Industries, on April 25, reported a 6 per cent year-on-year (YoY) rise in its consolidated profit to ₹ 22,434 crore for Q4FY25. Revenue from operations increased 10 per cent YoY to ₹ 2,64,573 crore. EBITDA for the quarter grew 3.6 per cent YoY to ₹ 48,737 crore, while EBITDA margin declined 90 bps YoY to 16.9 per cent.
After Q4FY25 results, several brokerage firm expressed their positive views on the Mukesh Ambani-led oil-to-telecom-to-retail conglomerate stock.
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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
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