Reliance Industries: RIL logs highest one-day gain in 11 months, could rise 11-22% more

Mumbai: Reliance Industries surged over 5% on Monday – the highest single-day gains in 11 months – after better-than-expected fourth quarter results prompted traders to cut their bearish derivative bets. Most top brokerages retained their bullish ratings on the stock, with the price targets in the range of ₹1,520-1,660, implying upsides of 11-22% over Monday’s closing price of ₹1,366.

The conglomerate on Friday reported 2% growth in its consolidated net profit for the fourth quarter ended March 2025 and revenue from operations increased 10% year-on-year (YoY), exceeding analysts’ expectations.

“The strong fourth quarter earnings led to some short covering by traders, which resulted in the rally,” said Sunny Agrawal, head of research at SBI Securities. “The retail segment posted good results despite a weaker demand environment, and the telecom business has been doing well since the tariff hike last year.”

Brokerage Bernstein said improving growth outlook, supportive valuations, and a better retail performance could drive the stock’s re-rating.

Reliance shares have lagged behind the benchmark Nifty in the past three- and five-year periods due to concerns over the outlook of consumer businesses, pressure on gross refining margins (GRMs) in the oil business and uncertainty over the prospects of its new energy ventures.

The stock rose 6.7% in the past three years, against the Nifty’s gains of 41.1% in the same period. In the past five years, it advanced 113% compared with the index’s 160% rise.Swarnendu Bhushan, co-head of institutional research at brokerage PL Capital, said that the GRMs are still below the long-term average of $6-7 per barrel, and are likely to be slightly lower than these levels due to the upcoming glut in refining.”More than O2C (Oil-to-Chemicals), the performance of the stock would be more affected by its progress in digital services, retail and new energy,” said Bhushan. “Although we remain positive on the stock, we do not see any near-term triggers.”

Agrawal said it is a good time to buy the stock for investors with a 12-month horizon, for a target of ₹1550-1,600.

“Over the next two years, while the oil and gas and chemical business is expected to have minuscule or no growth for Reliance, the consumer business, namely telecom and Retail will be the growth driver for the company,” he said.