Nikhil Bhandari, analyst at Goldman Sachs, estimated Reliance’s EBITDA growth will accelerate to 16% in FY26 from just 2% in FY25. Bhandari also forecasted cash return on capital invested (CROCI) to expand by around 140 basis points to 11% in FY27, while noting that there is “limited room for further consensus earnings cut.”
Four catalysts driving the upgrade
The first catalyst cited by the brokerage is an improvement in refining fundamentals for RIL, driven by “favourable feedstock crude dynamics (wider light-heavy crude differentials) and tightening global refining supply-demand.” Goldman Sachs noted that recent delays in refinery projects and closure announcements in developed markets have created a supply-driven tightness in the sector, which benefits complex refiners such as Reliance.Second, the brokerage sees Reliance’s retail business returning to around 15% top-line growth following “the completion of stores / B2C restructuring and higher JioMart traction (through increased focus on quick commerce).”
The third key driver for the upgrade is the anticipated telecom tariff hike in the second half of FY26, expected to coincide with strong subscriber momentum in the company’s Jio business. “Our India Telecom team forecasts 23% EBITDA growth for Jio Infocomm in FY26E (11% above Visible Alpha consensus data) driven by a tariff hike in 2HFY26 (Mar’26 exit ARPU at Rs236, +14% YoY),” Goldman Sachs said.
Finally, Goldman Sachs said it believes the commissioning of new energy capacities from calendar year 2026, namely 10GW of integrated solar and 30 GWh of battery pack and cell assembly, could act as a longer-term catalyst.
Valuation and risk-reward
Goldman Sachs has set a 12-month price target of Rs 1,660 for Reliance’s local shares, representing an upside of 17.5% from the stock’s current levels. The brokerage continues to see “favourable risk-reward with the stock trading near 0.5SD below its historical mean on 12m forward EV/EBITDA,” and points out that Reliance is trading at “the widest NAV discount since COVID.”
Bhandari emphasized that the stock has already begun outperforming, noting that it “outperformed the Sensex Index by 9% in the last three months.” Goldman Sachs highlighted that historically, Reliance has traded at a premium to NAV when all business segments show simultaneous growth.
In terms of bear and bull case scenarios, Goldman estimates an 11% downside and 61% upside respectively.
Shares and technical indicators
Shares of Mukesh Ambani’s Reliance Industries were trading 0.1% lower on Tuesday at Rs 1412.50 on the BSE.
From a technical standpoint, Reliance’s stock has gained nearly 18% over the past three months but declined 1.4% in the past week. It is trading above five of its eight key simple moving averages, including the 30-day, 50-day, 100-day, 150-day, and 200-day SMAs.
The stock’s Relative Strength Index stands at 55.1, indicating it is neither overbought nor oversold, while the MACD is at 21.7, above the center line but below the signal line.
Goldman Sachs also flagged several upcoming events as potential triggers for the stock, including a Jio tariff hike in 2HFY26 and the continued strength in Singapore refining margins through FY27.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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