Reliance Industries Ltd (RIL), the Mukesh Ambani-led conglomerate, has attracted fresh interest from overseas brokerages again, as UBS re-initiated coverage of the stock with an optimistic view. The Swiss brokerage has assigned RIL a ‘Buy’ rating with a target of Rs 1,750, which indicates a possible appreciation of approximately 25% from here. This is just before the firm’s forty-eighth Annual General Meeting (AGM) on Friday, August 29, 2025, where investors were eagerly waiting for developments relating to the group’s strategic efforts, especially pertaining to Jio and new energy businesses.
RIL shares traded at Rs 1,398.90 on Tuesday, down 0.99% from previous day’s close. UBS is of the view that the stock has ample scope for re-rating in the next 12 months, after a phase of relative underperformance relative to the MSCI India index. The brokerage notes the group’s earnings makeover over the last five years, which has created the avenue for value unlocking, especially in telecom and retail.
Jio Maturity and Value Unlocking
One of the major contributors to UBS’s optimism is the value unlocking from Reliance Jio, the telco unit that has gradually matured over the years. UBS believes this to be a 12–18 month process. With mid-teens growth and progressively stronger cash flows, Jio is at a stage where its contribution to the bottom line is becoming more sustainable, and it’s a strong candidate for value expansion.
“Retail growth should pick up to the teens as B2B business restructuring comes to an end and the last 24 months of store expansion begins paying off,” UBS said. The brokerage also pointed to the new energy segment, which will begin contributing to EBITDA starting FY27 with 10GW of Solar PV and 15GWh of battery capacity.
RIL’s retail and telecom business have become much more relevant to the total earnings pool of the company. Over FY15–FY25, the EBIT contribution of telecom and retail increased from close to zero to 48%, while the P/E multiple widened from 10 times to 20 times. UBS observes that Indian retail P/Es are in the range of 40–60 times, while telecom P/Es range between 35–40 times. This implies that RIL’s comparatively conservative valuations may broaden as these segments sustain growth, enhancing the argument for re-rating.
Stock Performance and Valuation Metrics
In spite of the optimistic tone, RIL’s stock has not been easy this year. The share price is lower by 7.6% in 2025, as against the 0.8% fall in the BSE Sensex and 20% drop in the BSE Oil & Gas index. UBS uses a sum-of-the-parts (SOTP) valuation method for RIL, given the conglomerate’s business segments are of a diverse nature.
For the oil-to-chemical (O2C) segment, UBS used an EV/EBITDA multiple of 8.5 times.
For oil and gas, it used 5 times multiple.
New energy was valued at 9 times FY30e EBITDA.
The retail business got an FY27e EV/EBITDA multiple of 33 times, based on sub-segment values.
For Jio, the DCF model suggests an FY27e EV/EBITDA of 14 times.
UBS’s approach highlights the need to appreciate RIL’s different segments’ unique growth patterns and risk behaviors, and not depend on a unified aggregated valuation metric.
Jefferies Reiterates Confidence in Strategic Priorities
The UBS forecast is in line with earlier comments by Jefferies, which too has a ‘Buy’ rating on RIL with a target price of Rs 1,670 lower than the earlier one. In an August 18 note, Jefferies pointed to the FY25 annual report and mentioned growth in capitalized expenses in Jio and Retail, level consolidated capex, and improvement in free cash flow led primarily by Jio. Net debt marginally increased.
Jefferies also provided strategic priorities for RIL:
Jio: Build home broadband and enterprise business.
Retail: Enhancing growth and FMCG portfolio.
Oil-to-Chemicals (O2C): Renewable energy initiatives for long-term sustainability and earnings diversification.
These priorities support the theme that RIL is shifting from being a large, commodity-based cyclical conglomerate to a diversified, growth-driven company with stable cash flows from telecom and retail.
Looking Ahead: AGM Expectations
With RIL gearing up for its AGM on August 29, investors would keenly watch management guidance on Jio and new energy. As telecommunications and retail now contribute close to half of the EBIT, the market would like to know how the group is going to unlock shareholder value from such quicker-growing, lower-cyclical businesses.
The next AGM would also clear the air on plans to expand stores, clean energy milestones, and possible monetization of Jio through strategic alliances or partial sales. The reports by UBS and Jefferies indicate that the market has already factored in some of the expansion potential, but there is substantial upside if execution matches strategic direction.
Overall, Reliance Industries is at a crossroads. With telecom and retail leading earnings expansion, new energy set to chime in on the medium term, and strong valuation support from both UBS and Jefferies, the stock offers an attractive long-term bet for investors. Although short-term market volatility cannot be avoided, the synergy of strategic overhaul, value unleashing, and diversified growth drivers indicates a hopeful script for the Mukesh Ambani-led group in the next 12–18 months.
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