4 reasons why Reliance Industries shares could rally up to 18%

Economic Times

02-07-2025

Shares of Reliance Industries Ltd (RIL), India's most valued company, could surge as much as 18% from current levels, driven by strong prospects in its new energy ventures, an expected rebound across key business verticals, and bullish technical signals.
ADVERTISEMENT Analysts at brokerages including Nuvama and CLSA have cited multiple tailwinds that may power the next leg of the stock's rally, with target prices ranging from Rs 1,650 to as high as Rs 1,801.
The stock was trading at Rs 1,518.65 on the BSE on Wednesday, July 2, down 0.6%. While RIL shares have underperformed over the last one year, falling 2.7%, they have rebounded smartly in recent months, gaining 24.4% in the last six months, 21.2% in the last three months, and 4.7% in the past week alone.
Nuvama has assigned the highest Street target of Rs 1,801 for Reliance, citing a potential re-rating similar to the one seen after the 2017 Jio launch. The firm's optimism stems from RIL's aggressive push in the New Energy space, particularly in solar modules.At its recent analyst meeting, RIL announced the operationalisation of its first 1GW Heterojunction Technology (HJT) module manufacturing line, which will eventually scale to a fully integrated 10GW capacity by early calendar year 2026. Nuvama's channel checks suggest RIL has already begun offering these modules in the domestic market, even before its power generation arm goes live."RIL's modules business (20GW capacity) yields an EV of $20bn, which could trigger a valuation re-rating for RIL—similar to the trend seen post-RJIO's launch in 2017. RIL's New Energy rollout shall not only add 50%-plus to PAT, but also rerate valuations, including the O2C business given its net zero-carbon target by 2035," said Nuvama analysts Jal Irani and others.
ADVERTISEMENT The brokerage estimates profit after tax (PAT) from the New Energy segment, including modules and power, to grow from Rs 20 billion in FY27 to Rs 114 billion by FY30, a compound annual growth rate of 140% over FY26–30. The share of New Energy in total PAT could hit 9% by FY30 under conservative assumptions, with a faster ramp-up potentially delivering further upside.
On the charts, RIL is showing strong bullish undertones. The stock is currently trading above all its key simple moving averages — 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day — suggesting strength across both short-term and long-term time frames.
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Momentum indicators support this view. The Relative Strength Index (RSI) stands at 70.6, in overbought territory, which typically signals strong buying pressure, albeit with a possibility of a short-term pullback.
The Moving Average Convergence Divergence (MACD) is at 25.6 and remains above both the center and signal lines, further reinforcing the ongoing uptrend.
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According to CLSA, Reliance is entering a critical earnings cycle, starting with its first-quarter results (Q1FY26) expected later in July. The brokerage sees this as a turning point following a subdued FY25."Reliance Industries is entering into an exciting period, beginning with its 1QFY26 earnings, where we expect to see notable improvements in KPIs across its key businesses," CLSA analyst Vikash Kumar Jain said, maintaining an 'outperform' rating and a target price of Rs 1,650, implying a 8.6% potential upside.
ADVERTISEMENT CLSA believes that last year's drag was primarily due to operational streamlining in retail, which has now concluded. The brokerage expects Reliance Retail to report high-teens EBITDA growth year-on-year from Q1 onward.In telecom, Jio added 2.6 million mobile subscribers in April 2025 alone, as per TRAI data. Jain noted that broadband subscriber additions, including AirFiber, could lead to 9–10 million new subscribers in Q1, more than the total 6 million added in all of FY25.Further, CLSA's GRM (gross refining margin) marker indicates a quarter-on-quarter gain of $1.1/bbl, which could boost profitability in the Oil-to-Chemicals (O2C) segment.
RIL's upcoming annual general meeting, expected in August or September, is likely to be a key event for investors. CLSA believes the AGM could provide updates on a possible Jio IPO, along with developments in the quick commerce, FMCG, and new energy businesses. "Accordingly, watch out for the upcoming AGM in August/September. We are raising the SotP-based target price to Rs 1,801, highest on Street, to factor in the potential for higher-than-than-expected module profits; reiterate 'buy'," Nuvama said.In the 2024 AGM, RIL had announced its ambition to increase the New Energy segment's PAT contribution to over 50% by 2030. Nuvama expects additional New Energy businesses, including a planned 30GWh battery facility, electrolyser manufacturing via a partnership with Nel ASA, and 55 upcoming compressed biogas (CBG) plants, to contribute in a phased manner.
While RIL shares have already gained over 25% in 2025 so far, analysts see more room to run, backed by structural growth in green energy, improving fundamentals in retail and telecom, and key catalysts on the horizon. With the highest target at Rs 1,801, the implied upside from current levels stands at nearly 18%, making the stock one to watch in the coming months.
Also read | Solar a Jio moment for Mukesh Ambani? Reliance shares get highest target price
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)