Morgan Stanley ups RIL target price on China's 'anti-involution' focus; here's why
RIL has successfully demonstrated its ability to execute large scale unrelated diversifications through its foray into retail as well as digital services in the past.
- Sep 2, 2025,
- Updated Sep 2, 2025 10:21 AM IST
Morgan Stanley has reportedly maintained its 'overweight' view on Reliance Industries Ltd (RIL) while upping its target price on the oil-to-telecom major to Rs 1,701 apiece from Rs 1,602 per share earlier. Anti-Involution & AI would redefine RIL's equity story, the foreign brokerage reportedly said, as it sees RIL as the largest beneficiary of China's 'anti-involution' focus on energy and solar supply chains. RIL's self anti-involution efforts in consumer retail and telecom are also yielding results, Morgan Stanley said as per a media report.
The foreign brokerage estimates that involution adds $20 billion in NAV (Net Asset Value) and 17 per cent to FY28 earnings per share (EPS), it said as per NDTV Profit.
Morgan Stanley analysts reportedly said China’s anti-involution measures signal a bottoming of the petrochemical cycle, while Beijing’s push to tackle solar sector overcapacity is expected to bolster pricing for Reliance’s solar supply chain. They projected that such efforts, both in China and at Reliance Industries, could unlock $20 billion in net asset value and raise the company’s FY28 earnings forecast by 17 per cent.
A dozen of brokerages retained their 'Buy' ratings on Reliance Industries post its 48th AGM, where the company hinted at its journey towards a tech-driven entity focusing on New Energy and AI. For the first time, a clear timeline has been provided for listing of Jio- in H1CY26. RIL has also announced formation of a new subsidiary- Reliance Intelligence which would house its initiatives on AI front, PL Capital noted.
"The focus on hydrocarbon segment also continues with earlier announced investments of Rs750bn in 1.2mmtpa PVC plant at Nagothane, expanded cPVC and 3mmtpa PTA plant at Dahej and 1mmtpa specialty polyester at Palghar," it said.
PL Capital said RIL has successfully demonstrated its ability to execute large scale unrelated diversifications through its foray into retail as well as digital services in the past.
Since 2021, it has been working on its New Energy segment where it has also partnered with several technology companies. In absence of further details, PL Capital have valued its New Energy segment at 2 times its stated capex of Rs 75,000 crore, valuing it at Rs111/share.
ICICI Securities noted that the CMD Mukesh Ambani reaffirmed the company’s goal to double Ebitda by FY27, driven by growth in digital, retail and new energy segments.
"He emphasised RIL’s aim to transform to a ‘Deep Tech’ enterprise via aggressive build-out of AI capabilities (formed a new subsidiary, AI-related tie-ups with Google/Meta). Consumer products segment is another focus area with the sub-segment likely to become a 100% subsidiary of RIL. New energy plans are gaining traction, albeit we believe capex in this segment needs to expand to achieve the desired Ebitda," the brokerage said.
Morgan Stanley has reportedly maintained its 'overweight' view on Reliance Industries Ltd (RIL) while upping its target price on the oil-to-telecom major to Rs 1,701 apiece from Rs 1,602 per share earlier. Anti-Involution & AI would redefine RIL's equity story, the foreign brokerage reportedly said, as it sees RIL as the largest beneficiary of China's 'anti-involution' focus on energy and solar supply chains. RIL's self anti-involution efforts in consumer retail and telecom are also yielding results, Morgan Stanley said as per a media report.
The foreign brokerage estimates that involution adds $20 billion in NAV (Net Asset Value) and 17 per cent to FY28 earnings per share (EPS), it said as per NDTV Profit.
Morgan Stanley analysts reportedly said China’s anti-involution measures signal a bottoming of the petrochemical cycle, while Beijing’s push to tackle solar sector overcapacity is expected to bolster pricing for Reliance’s solar supply chain. They projected that such efforts, both in China and at Reliance Industries, could unlock $20 billion in net asset value and raise the company’s FY28 earnings forecast by 17 per cent.
A dozen of brokerages retained their 'Buy' ratings on Reliance Industries post its 48th AGM, where the company hinted at its journey towards a tech-driven entity focusing on New Energy and AI. For the first time, a clear timeline has been provided for listing of Jio- in H1CY26. RIL has also announced formation of a new subsidiary- Reliance Intelligence which would house its initiatives on AI front, PL Capital noted.
"The focus on hydrocarbon segment also continues with earlier announced investments of Rs750bn in 1.2mmtpa PVC plant at Nagothane, expanded cPVC and 3mmtpa PTA plant at Dahej and 1mmtpa specialty polyester at Palghar," it said.
PL Capital said RIL has successfully demonstrated its ability to execute large scale unrelated diversifications through its foray into retail as well as digital services in the past.
Since 2021, it has been working on its New Energy segment where it has also partnered with several technology companies. In absence of further details, PL Capital have valued its New Energy segment at 2 times its stated capex of Rs 75,000 crore, valuing it at Rs111/share.
ICICI Securities noted that the CMD Mukesh Ambani reaffirmed the company’s goal to double Ebitda by FY27, driven by growth in digital, retail and new energy segments.
"He emphasised RIL’s aim to transform to a ‘Deep Tech’ enterprise via aggressive build-out of AI capabilities (formed a new subsidiary, AI-related tie-ups with Google/Meta). Consumer products segment is another focus area with the sub-segment likely to become a 100% subsidiary of RIL. New energy plans are gaining traction, albeit we believe capex in this segment needs to expand to achieve the desired Ebitda," the brokerage said.