Foreign brokerage UBS has resumed coverage on Reliance Industries Ltd (RIL) with a ‘Buy’ rating and a target price Rs 1,750 apiece, as it expects the Mukesh Ambani stock to perform well over the next 12 months, following a period of underperformance over MSCI India.
The optimism is on account of the group’s earnings transformation of last five years, which UBS believes has opened the path towards value unlocking.
The UBS target comes ahead of the oil-to-telecom major’s forty-eighth annual general meeting (AGM) on Friday, August 29, 2025 at 2:00 PM. The foreign brokerage sees Jio value unlocking in 12-18 months, as the telecom arm reaches ‘maturity’ with mid-teens growth and growing cash flows.
“Retail growth should improve to teens as restructuring of B2B come to a close and store expansion of past 24 months shows results. We also expect the new energy to start contributing Ebitda from FY27e with 10GW of Solar PV and 15GWh of Battery capacity by then,” UBS said in a note.
On Tuesday, shares of Reliance Industries were trading 0.99 per cent lower at Rs 1,398.90. UBS target suggests 25 per cent upside over the prevailing level.
The RIL stock is down 7.6 per cent in 2025 so far compared with a 0.8 per cent drop in the BSE Sensex and a 20 per cent plunge in the BSE Oil & Gas index.
UBS’ target is SOTP based. It derived the RIL price target using EV/Ebitda of 8.5 times for oil-to-chemical (O2C) biz, 5 times for oil & gas and 9 times on FY30e Ebitda for New Energy. Besides, the foreign brokerage assigned FY27e EV/Ebitda of 33 times for retail based on sub-segment values.
UBS said the DCF for Jio impliesFY27e EV/Ebitda of 14 times.
“Between FY15-25, EBIT contribution of retail and telco has risen from almost zero to 48 per cent while P/E has expanded from 10 times to 20 times (Indian retail P/Es range from 40-60 times and telco P/E from 35-40 times). Given upcoming value unlocking potential in these less cyclical and faster growing businesses, we see room for re-rating in the stock,” UBS said.
Earlier in an August 18 note, Jefferies said RIL’s FY25 annual report showed rise in capitalized costs in Jio and Retail, flat consolidated capex with Jio and Retail lower YoY, FCF improvement driven by Jio and marginal rise in net debt. Priorities, it said, include home broadband and enterprise in Jio; improving growth and FMCG in Retail; renewable in O2C. The broerage retained ‘Buy’ and a target price of Rs 1,670 on RIL.