RIL shares are down 19% this year: Three events that could drive a re-rating in the near term
RIL share price: The brokerage expects Reliance Industries’ blended gross refining margins (GRMs) to remain strong at above $15 per barrel, compared with a normalised level of around $10 per barrel.
- Sep 10, 2026,
- Updated Sep 10, 2026 9:30 AM IST
Shares of Reliance Industries Ltd (RIL), which are down 19% this year, are set to witness a strong catalyst phase, with three significant positive developments over the next six months to drive a re-rating of the stock, according to Antique Broking. The brokerage expects RIL shares to hit a price target of Rs 1,717 per share in year. At 16.6 times estimated first-half FY29 earnings, the stock’s valuation remains reasonable, according to the brokerage. It has reiterated its BUY rating and raised its SOTP-based target price to Rs 1,717 per share, implying an upside potential of around 33%. In the current session, RIL stock was trading on a flat note at Rs 1278.25 in early deals. Market cap of the firm stood at Rs 17.29 lakh crore.
GRMs to remain strong
The ongoing squeeze in the middle-distillate market is expected to keep refining margins elevated, with Russian refinery runs at their lowest level in 21 years and global crude processing volumes about 6.5 million barrels per day below year-ago levels. As a result, middle-distillate cracks have remained around $70 per barrel.
Against this backdrop, the brokerage expects Reliance Industries’ blended gross refining margins (GRMs) to remain strong at above $15 per barrel, compared with a normalised level of around $10 per barrel. This is expected to support consolidated EBITDA, with FY27E and FY28E estimates pegged at 11.3% and 4.2%, respectively, above consensus expectations.
The brokerage expects Reliance as particularly well placed to benefit from the favourable refining environment, given its export-oriented refinery in a Special Economic Zone (SEZ), which is exempt from the Special Additional Excise Duty (SAED).
The brokerage listed three developments, which could drive a rerating of the stock.
1) Historic high refining margins over the next 12-18 months, 2) Jio-IPO and tariff hike and 3) Commissioning of new energy by January-27.
Refining margins may remain at historic highs
Reliance Industries is expected to benefit from an extended period of exceptionally strong refining margins, with the middle-distillate shortage likely to persist over the next 12–18 months.
Ukrainian attacks on Russian refining infrastructure have pushed Russia’s refinery runs to a 21-year low, turning the country into a net importer. At the same time, disruptions to flows through the Strait of Hormuz have effectively halted Middle East diesel and jet fuel exports.
Global crude processing volumes are currently around 6.5 million barrels per day below year-ago levels, leaving diesel exports 1.5–2 million barrels per day below normal levels, a decline of about 21% year-on-year.
The market’s traditional supply buffers have also weakened sharply. Global crude and petroleum product inventories have fallen by around 600 million barrels since March and continue to decline. Gasoil and gasoline inventories are now close to five-year lows, just as winter demand begins to build.
Gas oil cracks have averaged around $67 per barrel in the second quarter to date, while aviation turbine fuel (ATF) cracks stand at about $56.5 per barrel. After adjusting for the Special Additional Excise Duty (SAED), spreads remain robust at approximately $35.6 per barrel for gasoil and $30 per barrel for ATF.
While higher crude premiums have absorbed part of the unusually strong refining spreads, analysts estimate that this impact is unlikely to exceed around $10 per barrel.
Reliance Industries is considered the biggest beneficiary of the favourable refining environment in India, particularly because of its SAED-exempt refinery located in a Special Economic Zone (SEZ).
According to the estimates, every $5-per-barrel improvement in refining margins could add around Rs 22,700 crore to Reliance’s annualised EBITDA, equivalent to approximately 12.7% of its FY26 consolidated EBITDA.
Even using conservative GRM assumptions of $12.5 per barrel for FY27E and $11 per barrel for FY28E, the brokerage expects Reliance’s consolidated EBITDA to remain 11.3% and 4.2%, respectively, above consensus estimates.
Jio IPO strengthens the Reliance SOTP case
The draft red herring prospectus (DRHP) filed for Jio has provided further validation for the brokerage’s sum-of-the-parts (SOTP) valuation of Reliance Industries. The Jio DRHP implies an equity valuation of around Rs 12.5 lakh crore. Based on estimated Jio EBITDA of approximately Rs 1 lakh crore for the first half of FY29, this translates into an implied EV/EBITDA multiple of around 12.7 times, compared with the 12x multiple used in the brokerage’s SOTP valuation.
Although the valuation does not factor in a holding-company discount, the brokerage believes the proposed Jio IPO, along with a potential 15% telecom tariff increase, could act as a re-rating catalyst for the broader telecom sector.
The sector is already supported by improving fundamentals, including strong free cash flows and return ratios above 25%. These factors could help offset the holding-company discount over time, according to the brokerage.
New-energy commissioning could provide another catalyst
Reliance’s new-energy business could provide another potential trigger, with the company on track to begin commissioning 20 GW of solar capacity and 40 GW of battery capacity from January 2027.
Following this, Reliance plans to develop a 22 GW solar power facility in Kutch over the next two years. The brokerage's calculations indicate that these projects could generate an internal rate of return (IRR) of more than 16%, even without factoring in production-linked incentive (PLI) benefits.
The brokerage currently values Reliance’s New Energy business at Rs 123 per share. This valuation primarily reflects the solar and battery facilities based on the Rs 85,000 crore investment outlined by management, along with only a portion of the planned capex for the power-generation business.
Around Rs 50,000 crore of capex for the power-generation facility is factored in up to the first half of FY29, leaving potential for further value creation as the projects progress. The development of hydrogen and green-chemicals businesses could provide an additional upside to the New Energy valuation.
Investment outlook
Reliance’s oil-to-chemicals (O2C) business is expected to benefit from elevated refining margins through FY28, while Jio is projected to deliver organic growth of around 4–5% even before any potential tariff increases. The New Energy business, meanwhile, could add a relatively visible captive-power opportunity as its projects move towards commissioning.
Retail remains the key weak spot for Reliance, although expectations for the business have already moderated significantly.
The brokerage identifies four key near-term catalysts for the stock: telecom tariff increases, a recovery in Retail, greater AI integration, and the commissioning of O2C and New Energy projects.
Shares of Reliance Industries Ltd (RIL), which are down 19% this year, are set to witness a strong catalyst phase, with three significant positive developments over the next six months to drive a re-rating of the stock, according to Antique Broking. The brokerage expects RIL shares to hit a price target of Rs 1,717 per share in year. At 16.6 times estimated first-half FY29 earnings, the stock’s valuation remains reasonable, according to the brokerage. It has reiterated its BUY rating and raised its SOTP-based target price to Rs 1,717 per share, implying an upside potential of around 33%. In the current session, RIL stock was trading on a flat note at Rs 1278.25 in early deals. Market cap of the firm stood at Rs 17.29 lakh crore.
GRMs to remain strong
The ongoing squeeze in the middle-distillate market is expected to keep refining margins elevated, with Russian refinery runs at their lowest level in 21 years and global crude processing volumes about 6.5 million barrels per day below year-ago levels. As a result, middle-distillate cracks have remained around $70 per barrel.
Against this backdrop, the brokerage expects Reliance Industries’ blended gross refining margins (GRMs) to remain strong at above $15 per barrel, compared with a normalised level of around $10 per barrel. This is expected to support consolidated EBITDA, with FY27E and FY28E estimates pegged at 11.3% and 4.2%, respectively, above consensus expectations.
The brokerage expects Reliance as particularly well placed to benefit from the favourable refining environment, given its export-oriented refinery in a Special Economic Zone (SEZ), which is exempt from the Special Additional Excise Duty (SAED).
The brokerage listed three developments, which could drive a rerating of the stock.
1) Historic high refining margins over the next 12-18 months, 2) Jio-IPO and tariff hike and 3) Commissioning of new energy by January-27.
Refining margins may remain at historic highs
Reliance Industries is expected to benefit from an extended period of exceptionally strong refining margins, with the middle-distillate shortage likely to persist over the next 12–18 months.
Ukrainian attacks on Russian refining infrastructure have pushed Russia’s refinery runs to a 21-year low, turning the country into a net importer. At the same time, disruptions to flows through the Strait of Hormuz have effectively halted Middle East diesel and jet fuel exports.
Global crude processing volumes are currently around 6.5 million barrels per day below year-ago levels, leaving diesel exports 1.5–2 million barrels per day below normal levels, a decline of about 21% year-on-year.
The market’s traditional supply buffers have also weakened sharply. Global crude and petroleum product inventories have fallen by around 600 million barrels since March and continue to decline. Gasoil and gasoline inventories are now close to five-year lows, just as winter demand begins to build.
Gas oil cracks have averaged around $67 per barrel in the second quarter to date, while aviation turbine fuel (ATF) cracks stand at about $56.5 per barrel. After adjusting for the Special Additional Excise Duty (SAED), spreads remain robust at approximately $35.6 per barrel for gasoil and $30 per barrel for ATF.
While higher crude premiums have absorbed part of the unusually strong refining spreads, analysts estimate that this impact is unlikely to exceed around $10 per barrel.
Reliance Industries is considered the biggest beneficiary of the favourable refining environment in India, particularly because of its SAED-exempt refinery located in a Special Economic Zone (SEZ).
According to the estimates, every $5-per-barrel improvement in refining margins could add around Rs 22,700 crore to Reliance’s annualised EBITDA, equivalent to approximately 12.7% of its FY26 consolidated EBITDA.
Even using conservative GRM assumptions of $12.5 per barrel for FY27E and $11 per barrel for FY28E, the brokerage expects Reliance’s consolidated EBITDA to remain 11.3% and 4.2%, respectively, above consensus estimates.
Jio IPO strengthens the Reliance SOTP case
The draft red herring prospectus (DRHP) filed for Jio has provided further validation for the brokerage’s sum-of-the-parts (SOTP) valuation of Reliance Industries. The Jio DRHP implies an equity valuation of around Rs 12.5 lakh crore. Based on estimated Jio EBITDA of approximately Rs 1 lakh crore for the first half of FY29, this translates into an implied EV/EBITDA multiple of around 12.7 times, compared with the 12x multiple used in the brokerage’s SOTP valuation.
Although the valuation does not factor in a holding-company discount, the brokerage believes the proposed Jio IPO, along with a potential 15% telecom tariff increase, could act as a re-rating catalyst for the broader telecom sector.
The sector is already supported by improving fundamentals, including strong free cash flows and return ratios above 25%. These factors could help offset the holding-company discount over time, according to the brokerage.
New-energy commissioning could provide another catalyst
Reliance’s new-energy business could provide another potential trigger, with the company on track to begin commissioning 20 GW of solar capacity and 40 GW of battery capacity from January 2027.
Following this, Reliance plans to develop a 22 GW solar power facility in Kutch over the next two years. The brokerage's calculations indicate that these projects could generate an internal rate of return (IRR) of more than 16%, even without factoring in production-linked incentive (PLI) benefits.
The brokerage currently values Reliance’s New Energy business at Rs 123 per share. This valuation primarily reflects the solar and battery facilities based on the Rs 85,000 crore investment outlined by management, along with only a portion of the planned capex for the power-generation business.
Around Rs 50,000 crore of capex for the power-generation facility is factored in up to the first half of FY29, leaving potential for further value creation as the projects progress. The development of hydrogen and green-chemicals businesses could provide an additional upside to the New Energy valuation.
Investment outlook
Reliance’s oil-to-chemicals (O2C) business is expected to benefit from elevated refining margins through FY28, while Jio is projected to deliver organic growth of around 4–5% even before any potential tariff increases. The New Energy business, meanwhile, could add a relatively visible captive-power opportunity as its projects move towards commissioning.
Retail remains the key weak spot for Reliance, although expectations for the business have already moderated significantly.
The brokerage identifies four key near-term catalysts for the stock: telecom tariff increases, a recovery in Retail, greater AI integration, and the commissioning of O2C and New Energy projects.