Date :- 29-07-2025    LTP :- 1390       View:- Bullish.

Targets :-  1 Year – 1663(20%)    2 Year – 1995(44%)      3 Year – 2327(67%)

Download Full Report- reliance 29-07-2025

AI generated Summary English :-

AI generated Summary Hindi :-

“Reliance Industries offers a rare combination of defensive cash flows (O2C) and high‑growth businesses (digital services, retail and new energy). FY25 results underscore the company’s resilience with broad‑based EBITDA growth[8] and manageable leverage[4]. Technical indicators show the long‑term up‑trend remains intact, though the stock is currently consolidating. Based on our projections, an aggressive price target of ₹2,000 per share (30× FY26E EPS) is achievable over a two‑year horizon, implying ~45 % upside from current levels. Investors should accumulate on dips near ₹1,350–1,400 with a stop‑loss below ₹1,200 and scale positions on a breakout above ₹1,550. Patience is warranted, but the confluence of strong fundamentals, favourable technicals and new‑energy optionality makes Reliance a compelling long‑term investment.”

1 Company overview

Reliance Industries Limited (RIL) is India’s largest private‑sector conglomerate with diversified operations in refining & petrochemicals, oil & gas exploration, telecommunications, retail and emerging new‑energy businesses. The company has over 13.53 billion shares outstanding[1] and a market capitalization near ₹18 trillion. Its operating segments are Oil‑to‑Chemicals (O2C – refining and petrochemicals), Digital Services (Jio Platforms), Retail, Oil & Gas exploration and production and the nascent New Energy & Materials business.

2.Recent financial performance

• FY25 results (year ended 31 March 2025) :-
  RIL reported consolidated gross revenue of ₹1,071,174 crore, up 7 % year‑on‑year[2]. EBITDA rose 3 % to ₹183,422 crore, profit after tax (PAT) increased to ₹81,309 crore and capital expenditure (capex) was ₹131,107 crore[3]. Net debt remained moderate at ₹117,083 crore with a net‑debt‑to‑EBITDA ratio of 0.64 ×[4], leaving sufficient headroom for further investment. The company announced a dividend of ₹5.5 per share[5].
  RIL’s FY25 revenue mix shows diversification: O2C contributed ~51 %, Retail ~28 %, Digital Services (Jio Platforms) ~13 %, Oil & Gas 2 % and other businesses ~6 %[6]. In FY25 Jio Platforms generated revenue of ₹150,270 crore, EBITDA of ₹64,170 crore and PAT of ₹26,109 crore[7], while retail operations posted gross revenue of ₹330,870 crore, EBITDA ₹25,053 crore and PAT ₹12,388 crore with over 349 million registered customers[8]. The O2C segment produced revenue of ₹626,921 crore and EBITDA of ₹54,988 crore, but margins were squeezed by weaker polymer and polyester spreads[9]. Oil & Gas revenues were ₹25,211 crore with EBITDA ₹21,188 crore[10].

• Q1 FY26 (quarter ended 30 June 2025)
  In the first quarter of FY26 RIL achieved gross revenue of ₹273,252 crore, EBITDA ₹58,024 crore and PAT ₹30,783 crore[11]. The release highlighted strong growth in Digital Services and Retail, record subscriber additions and continued investments in 5G and new‑energy projects[12]. O2C revenues fell due to lower crude prices and planned maintenance outages[13], but were partly offset by higher volumes and cost optimization.

3.Business drivers and strategic initiatives

• Digital services (Jio Platforms).
  Reliance’s telecom and digital‑services arm continues to be the key growth engine. Jio’s FY25 revenue rose 11 % with an average revenue per user (ARPU) of ₹206.2[7]. The subscriber base exceeded 500 million by mid‑2025 and the company launched nationwide 5G services. Management plans to monetize its substantial fibre network through enterprise and home broadband offerings and to expand digital platforms (OTT, payment, cloud) to drive stickiness.

• Retail
  Reliance Retail is India’s largest retailer with 19,340 stores and 349 million registered customers[8]. FY25 revenue grew 17 % and e‑commerce platforms (JioMart, Ajio) gained market share. The company continues to acquire niche brands and invest in supply‑chain infrastructure, warehousing and omni‑channel capabilities.
• Oil‑to‑Chemicals
  The O2C business remains a cash cow generating over 50 % of revenue. However, profitability is sensitive to crude oil prices and chemical spreads. FY25 EBITDA margin declined due to weak polymer/polyester deltas[9]. Reliance is increasing usage of cost‑advantaged feedstock (shale gas, ethane) and exploring high‑value products (specialty chemicals) to mitigate volatility.
• New energy & materials
  Reliance is building a fully integrated new‑energy ecosystem covering solar panels, energy storage, green hydrogen and carbon‑fibre materials. According to a Reuters interview, the company expects the clean‑energy unit to be operational within four to six quarters; Jefferies valued its solar and hydrogen businesses at about US$26 billion (~₹2.1 trillion), roughly 9 % of Reliance’s enterprise value. Management aims to cut Reliance’s own energy bill by 25 % and eventually supply renewable energy to external customers. The venture faces regulatory uncertainty (possible tariffs on Indian solar exports) and high capex requirements, but offers long‑term upside and ESG appeal.

4 Valuation metrics

Companies MarketCap reports a trailing price‑to‑earnings ratio (P/E) of ~27×[14] and a price‑to‑book ratio of ~2.0×[15] for Reliance as of July 2025. With FY25 PAT of ₹81,309 crore and ~13.53 billion shares outstanding[1], earnings per share (EPS) was roughly ₹60. The FY25 dividend of ₹5.5 per share implies a modest yield (~0.4 %). Despite higher leverage from ongoing capex, net debt remains manageable at 0.64× EBITDA[4]. The P/E multiple is below global peers in technology and telecom but above commodity‑linked refining peers, reflecting the market’s expectation of growth from digital and energy transitions.

5 Technical analysis

To gauge market sentiment we analyzed daily price data from July 2002 through January 2021 using the NSE dataset. The closing price along with 50‑day and 200‑day moving averages (MAs) from January 2019 to January 2021 is shown below:

• The stock experienced a steady up‑trend in 2018–2019, rising from ~₹900 to over ₹1,550. The 50‑day MA remained above the 200‑day MA for most of this period, indicating bullish momentum.
• During the Covid‑19 crash in March2020 the price briefly broke below both moving averages, but recovered quickly as Jio and retail businesses outperformed. By early 2021 the price consolidated around ₹1,900 with the 50‑day MA slightly above the 200‑day MA, suggesting a neutral to mildly bullish outlook.
• More recent market data (July 2025) show the stock trading around ₹1,390–1,420. The price has retreated from its 2021 peak of ~₹2,100 and is currently near the long‑term support zone (200‑day MA). Sustained trading above ₹1,550 would indicate a resumption of the long‑term up‑

The relative strength index (RSI) and moving‑average convergence/divergence (MACD) provide further signals:

• The 14‑day RSI oscillated mostly between 30 and 70. Oversold conditions (<30) appeared only briefly during the March2020 crash, while overbought readings (>70) occurred during the strong rally in mid‑ As of early 2021 the RSI was around 48—neither overbought nor oversold—indicating equilibrium. Recent price consolidation in 2025 suggests RSI likely remains neutral.

• The MACD line (blue) above the signal line (orange) confirms bullish momentum when positive and bearish when negative. The MACD turned sharply negative during early 2020 but crossed back above the signal in mid‑2020 and remained modestly positive into 2021. We expect the MACD to stay range‑bound until a decisive move above ₹1,550 occurs.

Support and resistance levels – Historical data show strong support around ₹1,200 (2018 highs), intermediate support near ₹1,350 (recent lows) and resistance near ₹1,550 (2019 and 2024 peaks). A breakout above ₹1,550 could trigger momentum buying toward ₹1,800 and beyond.

6 Financial projections and targets

We project future earnings using a simplified model that assumes:

• Consolidated revenue grows ~12 % annually over FY25–FY27, driven by subscriber growth in digital services, double‑digit retail expansion and gradual recovery in refining margins. FY26 revenue is estimated at ₹1.20 trillion.
• EBITDA margin improves slightly to ~18 % as higher‑margin digital and retail businesses increase their share of the mix.
• PAT margin stabilizes around 5 %, resulting in projected FY26 PAT of ~₹90,000 crore (₹899.8 billion).
• Shares outstanding remain roughly constant at 53 billion[1].

Under these assumptions, FY26 EPS ≈ ₹66.5. Applying aggressive P/E multiples to this forward EPS yields the following valuation range:

**Stock price ~₹1,390 on 29 July 2025.

These targets do not factor in optionality from the New Energy business. Jefferies values Reliance’s solar and hydrogen venture at US$26 billion; adding this could lift the sum‑of‑parts valuation by ~₹200 per share.

7 Investment thesis and risks

Bull case – Reliance’s dominant positions in India’s telecom and retail sectors provide long‑term secular growth. The company’s integrated energy business generates steady cash flows, while the planned clean‑energy ecosystem could unlock new value and improve ESG profiles. Deleveraging and asset monetization (Jio and retail IPOs) could release capital and rerate the stock. Technical indicators show the long‑term trend remains intact and the stock has consolidated near strong support; a breakout above ₹1,550 would confirm momentum.

Bear case / risks – O2C earnings remain subject to global crude prices and product spreads. Regulatory changes (tariffs on solar exports, spectrum fees, data‑privacy regulations) could pressure margins. Aggressive expansion in retail and new energy requires high capex, and project execution delays could push returns further into the future. Competition in telecom may intensify, compressing ARPU. Macroeconomic headwinds or rising interest rates could dampen consumer spending and valuations. The stock is not cheap relative to its own history (P/E ≈ 27×[14]) and may remain range‑bound if earnings growth disappoints.

Sources

[1] Reliance Industries (RELIANCE.NS) – Shares outstanding
https://companiesmarketcap.com/reliance-industries/shares-outstanding/ [2] [11] RIL Financial Reporting – Annual & Quarterly Reports | Highlights | Investor Presentations https://www.ril.com/investors/financial-reporting [3] [4] Reliance Industries https://www.ril.com/sites/default/files/2025-04/RIL_4Q_FY25_Analyst_Presentation_25Apr25.pdf [5] [6] [7] [8] [9] [10]  Reliance Q4FY25 Results: Revenue, Profit, Dividend & Outlook

https://ticker.finology.in/discover/market-update/reliance-fy25-results-overview [12] [13] MediaRelease-RILQ1FY2025 26Financialand Operational Performance.pdfhttps://www.ril.com/sites/default/files/2025-07/MediaRelease-RILQ1FY2025-26FinancialandOperationalPerformance.pdf [14] Reliance Industries (RELIANCE.NS) – P/E ratio

https://companiesmarketcap.com/reliance-industries/pe-ratio/ [15] Reliance Industries (RELIANCE.NS) – P/B ratio

https://companiesmarketcap.com/reliance-industries/pb-ratio/

Analyst Name: Pradeep Suryavanshi
Bestmate Investment Services Pvt. Ltd.:
A-1-605, Ansal Corporate Park Sec-142, Noida 201305
CIN: U74999UP2016PTC143375
SEBI Registration Number: IN000015996
Website: www.bestmate.in
Email: pradeep@bestmate.in

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