Morgan Stanley bullish on Reliance Industries, sees rerating potential across verticals

The net debt and slower intensity of capex will support Reliance’s valuations in the future, says Morgan Stanley

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Morgan Stanley retained its bullish stance on Reliance Industries stock, citing potential re-rating opportunities across verticals.

The brokerage has a target price of Rs 3,046 on the RIL stock with an “overweight” call. Reliance Industries stock has surged 35 percent in the past year, and around 10 percent since the start of the year. The stock now trades at 24 times price-to-earnings and 10 times EV/EBIDTA based on the company’s FY26 earnings estimate.

According to Morgan Stanley, Reliance Industries has the potential to see re-rating across various verticals: new energy, refining, chemicals and telecom.

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Reduced debt and slower intensity of capex will support Reliance’s valuations. The brokerage said that the decline in net debt will lead to re-rating of the RIL stock.

Some of the positives highlighted by the brokerage were the pick-up in the demand for global fuel, leading to long-term concerns unwinding. Additionally, impending mobile phone tariff hikes promise to significantly boost Reliance Jio’s revenue and profit. The new energy vertical is also poised to generate fresh revenue.

On March 27, Goldman Sachs reiterated a “buy” rating on Reliance Industries, with as much as a 54 percent upside by FY26 in its bull case. It cited favourable risk-reward dynamics, value unlocking from its Disney joint venture, and enhanced return on capital investments.

With the capex cycle in two capital-intensive businesses, Reliance Retail and Jio Telecom, reaching its peak, RIL will now start seeing improvements in its overall performance, Goldman Sachs analysts said.

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Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.