Reliance Industries shares have corrected 27% from their recent peak of ₹1,608.
A subdued retail segment was the key reason for the weak performance in the recent times, but Kotak Institutional Equities expects the store-rationalisation cycle to end soon.However, the increased sanctions on Russia and repercussions of reciprocal tariffs by the US weakens the outlook for the refining business, the brokerage said.
As a result of this, Kotak has cut Reliance Industries’ Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) estimates for financial year 2026-2027 by 1% to 3%.Despite the cut, it expects the oil-to-telecom-to-retail conglomerate’s earnings to grow at a Compounded Annual Growth Rate (CAGR) of 11% over financial year 2024-2027.
Due to this 27% correction from the peak, Kotak Institutional Equities finds risk-reward to be more favourable or Reliance Industries. While the brokerage expects the retail business to improve over the next few quarters, the newsflow on the telecom business, IPO timelines and another tariff hike can be some key catalysts for the stock.
Brokerage firm Jefferies too has an “buy” rating on Reliance Industries and its price target of ₹1,600 implies a potential upside of 36% from current levels. Jefferies too has cited a potential tariff hike, Jio’s listing and an improvement in the profitability of the O2C business as some key triggers for the stock.
Out of the 38 analysts that have coverage on Reliance Industries, 34 of them have a “buy” rating on the stock, one has a “hold” rating, while three have a “sell” rating on the stock. A consensus estimates of price targets implies a potential upside of 31% for the stock going forward.
Shares of Reliance Industries ended 1.3% higher on Wednesday at ₹1,177.
