New Delhi: In recent times, the shares of Reliance Industries (RIL) have been on the decline. The RIL stock felt the heat due to simmering tensions in the Middle East and the relentless selling by foreign investors in the Indian stock market. However, in a sigh of relief for the existing investors and the people who are planning to buy RIL shares, many brokerage houses now believe that the decline has been excessive and the stock is available at an attractive valuation at current levels. Brokerage firm Motilal Oswal has backed Reliance Industries and advised investors to buy the shares of India’s biggest conglomerate. The brokerage says the the company has a strong business model and the upcoming triggers could results in its earnings swell in the coming years.
Why did RIL shares declined
Due to escalating tensions in the Middle East, there has been a sharp jump in the prices of crude oil and LNG. After this, RIL’s shares fell about 4 percent in a month. The Reliance Industries traded with 2.82 per cent gains at Rs 1,382.90 apiece at the time of writing this article on 5 March 2026.
The brokerage said that the recent decline in RIL share price is bigger than justified from the company’s business perspective, because an increase in crude oil prices may in some cases benefit the company rather than harm it.
RIL’s Advantage: How Crude Oil Prices Can Boost Profitability
According to analysts, there has been a sharp rise in diesel, which has increased from around $20 per barrel to about $35–42 per barrel.
Putting forward its points, Motilal Oswal states that Reliance’s refinery produces a large amount of diesel, so if diesel margins remain high, the company’s Gross Refining Margin (GRM) could also jump. The projection estimates that if the diesel crack remains around $30 per barrel, the RIL’s GRM could appreciate by $4–5 per barrel.
The brokerage also is of the view that rise in crude oil prices would lead to a jump in prices of petrochemical products. However, it may be noted that costs of Reliance’s petrochemical business do not rise as quickly because RIL’s dependence on crude-linked naphtha feedstock is only about 25 percent.
Reliance’s major feedstock comes from ethane and off-gas, which reduces pressure on costs and helps margins remain better.
The selling of Foreign Institutional Investors (FII) in the domestic market is also being touted as the big reason for the decline in RIL share price. By December 2025, FIIs held a 21.1 percent stake in Reliance Industries, while in March 2021 it was at a high of around 28.3 percent.
Motilal Oswal has maintained a BUY rating on RIL shares and have a target price of Rs 1,730 apiece. The brokerage believes the stock is available at an attractive valuation at current levels. There is a possbility of some major triggers like potential IPO of Jio, possible tariff increases in the telecom sector, and strong growth in the digital business.
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