RIL Shares Tumble 7% This Year; Brokerages Eye 2026 Catalysts
Overview
Reliance Industries shares have shed nearly ₹1.4 lakh crore in market cap this year, falling 7%. Concerns over Russian crude exposure and a slowdown in organised retail weigh on sentiment ahead of December quarter earnings. Brokerages, however, anticipate multiple growth triggers for 2026, expecting energy business strength to offset retail pressures.
Stocks Mentioned
Reliance Industries Ltd (RIL) has faced a challenging start to 2026, with its stock price declining approximately 7% year-to-date and erasing about ₹1.4 lakh crore from its market capitalization. This downturn follows a strong 2025 performance, where the Mukesh Ambani-led conglomerate saw its shares surge 29% and outperform the Nifty.
Brokerage Views Amid Caution
Sentiment has turned cautious as investors await RIL's December quarter earnings, scheduled for release on Friday. Despite near-term headwinds, analysts largely maintain a positive outlook for 2026, projecting multiple growth catalysts. Morgan Stanley's Mayank Maheshwari noted, "RIL's upcoming quarter will see energy shine with retail bumpy."
Energy Business Strength
Brokerages anticipate robust performance from RIL's energy segment. Morgan Stanley projects a 10% year-on-year rise in December quarter EBITDA, primarily driven by a 16% increase in the oil-to-chemicals business, benefiting from favorable refining conditions. Goldman Sachs echoes this, forecasting an 11% quarter-on-quarter and 16% year-on-year increase in oil-to-chemicals EBITDA. Profit growth, however, is expected to be limited to 1% due to higher depreciation and interest costs, particularly within the telecom division.
Retail Sector Pressure
The organised retail segment, however, is expected to face a slowdown. Goldman Sachs has revised its sales growth estimate for Reliance Retail to around 10% year-on-year, a significant moderation from the 21.3% growth seen in the September quarter. Factors like weak discretionary spending, base effects, and festive timing are cited as reasons for this moderation. Morgan Stanley expects retail growth of 9-10% year-on-year, partly impacted by the demerger of the consumer products business.
Future Catalysts
Despite near-term pressures, analysts foresee significant upside potential in 2026. Morgan Stanley maintains an 'Overweight' rating with a target price of ₹1,847. Jefferies, with a 'Buy' rating and a ₹1,830 target, expects the telecom business, Jio Platforms Ltd (JPL), to lead growth, forecasting 22% year-on-year revenue growth in FY27 supported by tariff hikes and broadband expansion. Focus will likely shift to JPL's imminent listing, potential tariff hikes, and the expansion of its Fixed Wireless Access (FWA) offering. Axis Capital views the recent stock fall as an opportunity, with valuations now trading at a discount to the five-year average, while Goldman Sachs believes the impact of Russian crude exposure concerns on medium-term earnings is limited.
