Reliance Industries: MOFSL shares RIL target if West Asia disruptions persist into H1FY27
RIL outlook: MOFSL said even if tensions ease soon, supply chain normalisation may lag, keeping product cracks elevated and supporting RIL's refining and petchem margin.
- Mar 13, 2026,
- Updated Mar 13, 2026 8:25 AM IST
MOFSL on Friday said geopolitical disruptions in the West Asia have tightened global refining and petrochemical markets and could support margins for Reliance Industries Ltd (RIL), while suggesting potential upside to its earnings and valuation if supply disruptions persist.
The brokerage said the blockade of the Strait of Hormuz, which accounts for roughly 20 per cent of global oil and LNG supply, along with disruptions to about 3-4 million barrels per day of refining capacity, export restrictions on refined products from China, and decade-high crude freight rates, have pushed product cracks sharply higher.
"We believe that even if tensions ease soon, supply chain normalisation may lag, keeping product cracks elevated and supporting RIL's refining and petchem margin," MOFSL said.
The brokerage see 8.5 per cent upside to FY27 Ebitda if disruptions persist through H1FY27.
MOFSL noted that gasoil, gasoline and jet fuel cracks rose to $42, $16 and $58 per barrel in March 2026 month-to-date (MoM), up 147 per cent, 40 per cent and 124 per cent above long-term averages. Polyethylene and paraxylene prices also increased 10-15 per cent MoM during the same period.
"Assuming gasoil/gasoline/jet fuel cracks sustain $15/5/15 per bbl above historical averages during 1HFY27, RIL’s O2C Ebitda could increase by $170 billion, implying 8.5 per cent upside to our FY27 consol. Ebitda (and a targte price of Rs 1,846 (current TP: Rs 1,750))," MOFSL said.
The domestic brokerage said following Russia’s invasion of Ukraine in February 2022, gasoil refining margins remained elevated through FY23 and FY24. During FY23, Reliance’s consolidated oil-to-chemicals Ebitda rose 18 per cent year-on-year (YoY) and remained stable in FY24 despite flat to slightly lower production meant for sale. Adjusted for the special additional excise duty paid on transportation fuel exports, the segment’s Ebitda increased 30 per cent YoY in FY23.
MOFSL added that petrochemical spreads could also expand as supply disruptions push up product prices, while Reliance’s diversified feedstock mix, with only about 30 per cent naphtha usage, helps limit crude-linked cost pressures. However, it cautioned that any reintroduction of export duties on fuels, similar to the July 2022 special additional excise duty, could cap refining margins and limit the upside to oil-to-chemicals earnings.
MOFSL assigned an equity valuation of Rs 590 per share to Reliance’s stake in Jio Platforms Ltd and Rs 560 per share to its stake in Reliance Retail Ventures Ltd. It also attributed Rs 174 per share to the new energy business, Rs 30 per share to Reliance Consumer Products Ltd, and Rs 26 per share to Reliance’s stake in JioStar.
MOFSL on Friday said geopolitical disruptions in the West Asia have tightened global refining and petrochemical markets and could support margins for Reliance Industries Ltd (RIL), while suggesting potential upside to its earnings and valuation if supply disruptions persist.
The brokerage said the blockade of the Strait of Hormuz, which accounts for roughly 20 per cent of global oil and LNG supply, along with disruptions to about 3-4 million barrels per day of refining capacity, export restrictions on refined products from China, and decade-high crude freight rates, have pushed product cracks sharply higher.
"We believe that even if tensions ease soon, supply chain normalisation may lag, keeping product cracks elevated and supporting RIL's refining and petchem margin," MOFSL said.
The brokerage see 8.5 per cent upside to FY27 Ebitda if disruptions persist through H1FY27.
MOFSL noted that gasoil, gasoline and jet fuel cracks rose to $42, $16 and $58 per barrel in March 2026 month-to-date (MoM), up 147 per cent, 40 per cent and 124 per cent above long-term averages. Polyethylene and paraxylene prices also increased 10-15 per cent MoM during the same period.
"Assuming gasoil/gasoline/jet fuel cracks sustain $15/5/15 per bbl above historical averages during 1HFY27, RIL’s O2C Ebitda could increase by $170 billion, implying 8.5 per cent upside to our FY27 consol. Ebitda (and a targte price of Rs 1,846 (current TP: Rs 1,750))," MOFSL said.
The domestic brokerage said following Russia’s invasion of Ukraine in February 2022, gasoil refining margins remained elevated through FY23 and FY24. During FY23, Reliance’s consolidated oil-to-chemicals Ebitda rose 18 per cent year-on-year (YoY) and remained stable in FY24 despite flat to slightly lower production meant for sale. Adjusted for the special additional excise duty paid on transportation fuel exports, the segment’s Ebitda increased 30 per cent YoY in FY23.
MOFSL added that petrochemical spreads could also expand as supply disruptions push up product prices, while Reliance’s diversified feedstock mix, with only about 30 per cent naphtha usage, helps limit crude-linked cost pressures. However, it cautioned that any reintroduction of export duties on fuels, similar to the July 2022 special additional excise duty, could cap refining margins and limit the upside to oil-to-chemicals earnings.
MOFSL assigned an equity valuation of Rs 590 per share to Reliance’s stake in Jio Platforms Ltd and Rs 560 per share to its stake in Reliance Retail Ventures Ltd. It also attributed Rs 174 per share to the new energy business, Rs 30 per share to Reliance Consumer Products Ltd, and Rs 26 per share to Reliance’s stake in JioStar.