RIL re-rating every quarter! Morgan Stanley sees $50bn value creation, shares target
The RIL re-rating is anticipated across every quarter in Calendar 2026. In Q1, confidence in the chemicals business is seen improving, supported by structural changes in global chemical markets.
- Dec 17, 2025,
- Updated Dec 17, 2025 1:59 PM IST
Morgan Stanley maintained its 'overweight' stance on Reliance Industries Ltd in tact, as it raised its base-case price target to Rs 1,847 per share from Rs 1,701, and retained a bull-case valuation of Rs 2,246 per share, citing more than $50 billion of potential net asset value creation across multiple growth engines, including the upcoming Jio Platforms IPO.
The RIL re-rating is anticipated across every quarter in Calendar 2026. In Q1, confidence in the chemicals business is seen improving, supported by structural changes in global chemical markets and reduced competition in key segments. In Q2, fuel refining is seen generating strong cash flows, with margins tracking near $14 per barrel, about 1.5 times mid-cycle levels, supported by limited global refining capacity and infrastructure disruptions. This refining cycle contributed $7–10 billion in net asset value.
In Q3, telecom and retail is seen driving earnings growth, with broadband subscriber additions outperforming and ARPU rising at a 9 per cent CAGR. The Gemini 3 AI platform may support migration from 4G to higher-priced 5G plans, further boosting free cash flows. In Q4, underwriting of AI data-centre capacity by US hyperscalers is seen bringing visibility on net asset value accretion from AI investments and monetisation initiatives, while the planned Jio Platforms IPO may act as a key catalyst for unlocking shareholder value.
Morgan Stanley noted that existing verticals are priced at mid-cycle earnings, but the monetisation cycle and capital redeployment into new growth engines remained underappreciated. Combined with fuel refining, chemicals, retail, telecom, and new energy, these factors may add over $50 billion in potential net asset value. The brokerage rolled its valuation forward to FY28 and raised earnings estimates by 1–4 per cent for FY26–FY28, expecting a 12 per cent earnings CAGR over FY25–FY28. Growth was driven by the tight refining cycle, global chemicals market involution, ramp-up in new energy, and monetisation of retail and digital investments.
Morgan Stanley said refining margins may continue to benefit from limited global supply and rising diesel prices, while telecom capital intensity have halve as subscriber growth accelerated. Reliance Industries’ integrated structure, monetisation strategy, AI initiatives, and the Jio Platforms IPO may sustain the re-rating trend every quarter, reinforcing the stock’s upside potential throughout 2026.
Morgan Stanley maintained its 'overweight' stance on Reliance Industries Ltd in tact, as it raised its base-case price target to Rs 1,847 per share from Rs 1,701, and retained a bull-case valuation of Rs 2,246 per share, citing more than $50 billion of potential net asset value creation across multiple growth engines, including the upcoming Jio Platforms IPO.
The RIL re-rating is anticipated across every quarter in Calendar 2026. In Q1, confidence in the chemicals business is seen improving, supported by structural changes in global chemical markets and reduced competition in key segments. In Q2, fuel refining is seen generating strong cash flows, with margins tracking near $14 per barrel, about 1.5 times mid-cycle levels, supported by limited global refining capacity and infrastructure disruptions. This refining cycle contributed $7–10 billion in net asset value.
In Q3, telecom and retail is seen driving earnings growth, with broadband subscriber additions outperforming and ARPU rising at a 9 per cent CAGR. The Gemini 3 AI platform may support migration from 4G to higher-priced 5G plans, further boosting free cash flows. In Q4, underwriting of AI data-centre capacity by US hyperscalers is seen bringing visibility on net asset value accretion from AI investments and monetisation initiatives, while the planned Jio Platforms IPO may act as a key catalyst for unlocking shareholder value.
Morgan Stanley noted that existing verticals are priced at mid-cycle earnings, but the monetisation cycle and capital redeployment into new growth engines remained underappreciated. Combined with fuel refining, chemicals, retail, telecom, and new energy, these factors may add over $50 billion in potential net asset value. The brokerage rolled its valuation forward to FY28 and raised earnings estimates by 1–4 per cent for FY26–FY28, expecting a 12 per cent earnings CAGR over FY25–FY28. Growth was driven by the tight refining cycle, global chemicals market involution, ramp-up in new energy, and monetisation of retail and digital investments.
Morgan Stanley said refining margins may continue to benefit from limited global supply and rising diesel prices, while telecom capital intensity have halve as subscriber growth accelerated. Reliance Industries’ integrated structure, monetisation strategy, AI initiatives, and the Jio Platforms IPO may sustain the re-rating trend every quarter, reinforcing the stock’s upside potential throughout 2026.