RIL: Stock analysts bet on New Energy after soft start to FY26; target prices
RIL expects auto fuel cracks to remain supported by the US driving season and lower global inventory levels. Further, an expected uptick in seasonal air travel should support jet fuel demand and cracks.
- Jul 21, 2025,
- Updated Jul 21, 2025 9:09 AM IST
A stake sale in Asian Paints boosted Reliance Industries' June quarter profit, but the overall numbers failed to meet analyst expectations. Marketmen tracking the oil-to-telecom major said that the quarter saw relatively low capex and Asian Paints gains, and yet net debt rose sequentially as RIL repaid certain creditors for capex. They called Q1 a soft start to FY26 due to weaker O2C and Retail segments, betting big on New Energy (NE) ramp up in quarters to come.
In the backdrop of weak Q1 results, the management gave a healthy outlook, with O2C supported by refinery closures in the West, Retail and Jio likely to accelerate, and the new energy ecosystem to fully operationalise in 4-6 quarters with partnerships, and a self-funded model in a few years.
"We believe the New Energy business could be the next growth driver for RIL, with the company targeting world-leading scale in integrated solar solutions and ESS battery manufacturing and implementation. Captive consumption of green energy produced may result in 25 per cent energy cost reduction for Reliance Group in the future," Nomura India said.
Reliance Industries is also targeting to rope in partners who can contribute in financing and offtake, according to management, it said while suggesting a target price of Rs 1,600 on the stock.
"We factor in a tariff hike in Jio for Q3FY26E and raise O2C earnings, building in higher GRM. We raise FY26/27E EPS by 4/7 per cent and TP by 10 per cent to Rs 1,600, with some expansion in target multiple of Other segments/New Energy. The stock performance has been strong in the last 3 months; we retain BUY, albeit seek better entry points," Emkay Global said.
MOFSL has cut its FY26-27 Ebitda by 1-2 per cent and PAT by 4 per cent each due to a broad-based earnings cut.
"While Q1 was soft, we remain sanguine on RIL’s growth prospects across segments and build in a CAGR of 11 per cent in EBITDA/PAT over FY25-28E," MOFSL said. It retained its 'Buy' with a revised target of Rs 1,700 against Rs 1,685 earlier. Jefferies suggested Buy on the stock with a target price of Rs 1,726.
RIL expects auto fuel cracks to remain supported by the US driving season and lower global inventory levels. Further, an expected uptick in seasonal air travel should support jet fuel demand and cracks.
Refining margins would be supported by significant refining capacity closures anticipated in Europe and North America during CY25/26, resulting in limited net capacity additions.
Nuvama said the NE ecosystem will ramp up in 4–6 quarters and would be the largest multi-decadal growth driver. It said Q1 Ebitda at Rs 42,900 crore, up 11 per cent YoY, was below its estimates on weak retail (up 13 per cent), O2C (up 11 per cent. The PAT beat was on one-off, it said.
"We expect fully integrated 10GW polysilicon-to-module facility by end-FY26, may add 6 per cent to consolidated PAT. NE platform to be self-funded in a few years. RIL developing next-generation tech across chain such as perovskite. iii) GH2 production on track to start before PLI deadline of FY27," it said while suggesting 'Buy’ with a target price of 1,767.
A stake sale in Asian Paints boosted Reliance Industries' June quarter profit, but the overall numbers failed to meet analyst expectations. Marketmen tracking the oil-to-telecom major said that the quarter saw relatively low capex and Asian Paints gains, and yet net debt rose sequentially as RIL repaid certain creditors for capex. They called Q1 a soft start to FY26 due to weaker O2C and Retail segments, betting big on New Energy (NE) ramp up in quarters to come.
In the backdrop of weak Q1 results, the management gave a healthy outlook, with O2C supported by refinery closures in the West, Retail and Jio likely to accelerate, and the new energy ecosystem to fully operationalise in 4-6 quarters with partnerships, and a self-funded model in a few years.
"We believe the New Energy business could be the next growth driver for RIL, with the company targeting world-leading scale in integrated solar solutions and ESS battery manufacturing and implementation. Captive consumption of green energy produced may result in 25 per cent energy cost reduction for Reliance Group in the future," Nomura India said.
Reliance Industries is also targeting to rope in partners who can contribute in financing and offtake, according to management, it said while suggesting a target price of Rs 1,600 on the stock.
"We factor in a tariff hike in Jio for Q3FY26E and raise O2C earnings, building in higher GRM. We raise FY26/27E EPS by 4/7 per cent and TP by 10 per cent to Rs 1,600, with some expansion in target multiple of Other segments/New Energy. The stock performance has been strong in the last 3 months; we retain BUY, albeit seek better entry points," Emkay Global said.
MOFSL has cut its FY26-27 Ebitda by 1-2 per cent and PAT by 4 per cent each due to a broad-based earnings cut.
"While Q1 was soft, we remain sanguine on RIL’s growth prospects across segments and build in a CAGR of 11 per cent in EBITDA/PAT over FY25-28E," MOFSL said. It retained its 'Buy' with a revised target of Rs 1,700 against Rs 1,685 earlier. Jefferies suggested Buy on the stock with a target price of Rs 1,726.
RIL expects auto fuel cracks to remain supported by the US driving season and lower global inventory levels. Further, an expected uptick in seasonal air travel should support jet fuel demand and cracks.
Refining margins would be supported by significant refining capacity closures anticipated in Europe and North America during CY25/26, resulting in limited net capacity additions.
Nuvama said the NE ecosystem will ramp up in 4–6 quarters and would be the largest multi-decadal growth driver. It said Q1 Ebitda at Rs 42,900 crore, up 11 per cent YoY, was below its estimates on weak retail (up 13 per cent), O2C (up 11 per cent. The PAT beat was on one-off, it said.
"We expect fully integrated 10GW polysilicon-to-module facility by end-FY26, may add 6 per cent to consolidated PAT. NE platform to be self-funded in a few years. RIL developing next-generation tech across chain such as perovskite. iii) GH2 production on track to start before PLI deadline of FY27," it said while suggesting 'Buy’ with a target price of 1,767.