Reliance Industries: Equirus sees 26% upside to 2027

What changed in the latest Equirus note

Equirus Securities said downside risks in Reliance Industries Ltd (RIL) are largely priced in, while new catalysts for a re-rating are beginning to emerge. The brokerage pointed to improving oil-to-chemicals (O2C) profitability, potential value unlocking in Jio, resilient Retail growth, and new energy projects that could start contributing over the next few quarters.

Based on this setup, Equirus upgraded the stock to LONG from ADD. It set a September 2027 target price of Rs 1,586, indicating 26% potential upside from the level referenced in the note.

Valuation metrics: what Equirus is highlighting

Equirus argued that the recent de-rating has pushed RIL’s valuation to levels it considers attractive. It said forward P/E has compressed to 19x compared with an average of 21x, while EV/EBITDA is at 9.9x.

The brokerage also flagged a combination of factors supporting its risk-reward view: medium-term underperformance, the possibility of a near-term positive earnings surprise in O2C, and valuation near what it called a post-Covid low.

The re-rating framework: assets, market cap, and capex cycles

Equirus linked RIL’s long-term market performance to its asset creation cycle. It said that over three decades, RIL’s asset base and market capitalisation have moved in “near-perfect lockstep,” with a correlation of nearly one.

In that framework, Equirus said a meaningful re-rating has historically required a large, transformative capex cycle. It cited two past phases: the Jamnagar expansion and the Jio buildout, where valuation multiples expanded as assets were created and earnings started reflecting those investments.

Historical ratios cited by Equirus

Equirus gave specific examples of how the market cap to assets ratio has behaved through major investment cycles. It said RIL’s m-cap to assets expanded from 0.4x to 1.9x by FY08 following the Jamnagar expansion. It also said the ratio rebounded from 0.5x during the Jio buildout phase to 1.2x by FY22 as earnings got reflected.

At present, Equirus said RIL’s market cap has remained broadly flat, compressing m-cap to assets to near a six-year low. It added a key qualifier: without a step-up in capex intensity, conditions for another major re-rating remain absent, based on the company’s historical pattern.

Broader Street positioning: consensus and recent calls

The data shared alongside the note showed a strong positive skew in the broader Street view. It reported a 96.55% Buy, 0.00% Hold, and 3.45% Sell consensus split.

On targets, the same compilation showed an average target price of Rs 1,696.16 versus a referenced price of Rs 1,269.20, implying a +33.64% spread. It also listed a high target of Rs 1,910 and a low target of Rs 1,510.

What Jefferies is focusing on: Jio tariff and IPO as triggers

Jefferies reiterated a positive stance, with separate notes referenced in the material. In one update, it adjusted its Reliance Industries price target to INR 1,695 from INR 1,755, while keeping the rating at Buy. Another update cited a day after RIL shares fell 4.4%, erasing Rs 94,000 crore in market value, Jefferies raised its view and set a 12-month target price of Rs 1,830 (rolling forward valuation to March 2027), implying about 21% upside from the previous close of Rs 1,507.

Jefferies identified a likely tariff hike at Jio and a potential IPO of the telecom arm as major re-rating triggers. It also shared a base-case assumption of EBITDA CAGR across segments for FY25–28: 21% at Jio, 14% at Retail, and 6% at O2C.

Motilal Oswal: target cut, but BUY maintained

Motilal Oswal maintained its BUY rating on Reliance Industries after what it termed a soft Q3 performance. It revised the target price to Rs 1,750 from Rs 1,790, a reduction of Rs 40. The brokerage framed this as a modest adjustment to reflect near-term challenges while keeping its longer-term view constructive.

Morgan Stanley: higher target and quarterly re-rating view for 2026

Morgan Stanley maintained its Overweight stance on Reliance Industries and raised its base-case target to Rs 1,847 from Rs 1,701. It also retained a bull-case valuation of Rs 2,246. The brokerage note referenced more than $10 billion of potential net asset value creation across growth engines, including the upcoming Jio Platforms IPO.

It also said the re-rating could play out across every quarter in calendar 2026, driven by a refining up-cycle, a telecom ARPU hike, retail growth, and ramp-up of the new energy business.

Snapshot table: key numbers mentioned

Market impact: what the numbers imply without overreach

The broker commentary collectively ties RIL’s potential re-rating to specific, identifiable drivers: O2C profitability trends, telecom tariff actions, possible Jio-related value unlocking, and retail growth momentum. The Equirus note adds an important counterbalance by emphasising that historically outsized equity returns have aligned with aggressive asset creation cycles, and it does not assume that condition is in place yet.

From the market-data snapshot provided, RIL’s recent returns have been weak over intermediate horizons: -12.29% over one month, -17.69% over six months, and -13.11% over one year, while still showing +27.50% over five years. This mixed return profile helps explain why valuation and catalysts are being discussed together in current broker notes.

Conclusion: what to watch next based on broker notes

Equirus’s LONG upgrade rests on the view that downside is priced in and near-term catalysts are lining up, while still flagging that past major re-ratings typically required higher capex intensity. Across other broker commentary, the next set of watchpoints repeatedly mentioned are O2C earnings momentum, telecom tariff actions, the timeline for a potential Jio-related value unlocking, and how quickly new energy projects start contributing over the coming quarters.