Reliance Industries Ltd had a weak start to 2026, losing nearly Rs 1.4 lakh crore in market capitalisation. The stock is down about 7% so far this year, dragged by concerns over exposure to Russian crude and slowing growth in organised retail. The fall comes after a strong 2025, when the Mukesh Ambani led company’s shares rose 29% and outperformed the Nifty. Sentiment has turned cautious ahead of the company’s December quarter earnings, which are due to be announced on Friday.
What’s ahead for Reliance in 2026?
Brokerages continue to remain positive on the stock, calling 2026 a year of multiple triggers. Most expect the upcoming results to show strong performance in the energy business, while retail sector faces pressure. “RIL’s upcoming quarter will see energy shine with retail bumpy,” Morgan Stanley’s Mayank Maheshwari said. “Earnings trajectory remains robust and the path for multiple catalysts every quarter is in play. Consumer retail could drag stock performance near term.” Morgan Stanley expects December quarter EBITDA to rise 10% year-on-year, driven by a 16% increase in the oil-to-chemicals business as refining conditions remain favourable. Profit growth, however, is expected to be limited to 1% due to higher depreciation and interest costs, especially in the telecom segment. Goldman Sachs also expects strong refining performance, with oil-to-chemicals EBITDA rising 11% quarter-on-quarter and 16% year-on-year. The brokerage has cut its near-term retail growth estimates, keeping overall earnings largely unchanged. Axis Capital’s Gaurav Malhotra expects consolidated EBITDA of Rs 467 billion, up 7% year-on-year. Reliance Retail is expected to see slower growth in the December quarter. Goldman Sachs has cut its sales growth estimate to around 10% year-on-year, compared with 21.3% growth in the September quarter. “In line with trends seen at the peer companies, we expect moderation in 3Q earnings growth in retail due to weak discretionary spend, base effects and festive timing,” Goldman analyst Nikhil Bhandari said. Morgan Stanley expects retail growth of 9–10% year-on-year, partly impacted by the demerger of the consumer products business. Axis Capital also expects retail growth to slow due to a higher base, festive timing, GST rationalisation and the demerger of Reliance Consumer Products. On concerns around Russian crude, Goldman Sachs said the impact on earnings is likely to be limited. “We see limited impact of these factors on the company’s medium term earnings profile,” Bhandari said. “Refining fundamentals remain supported by tight product markets through CY27, while crude differentials across alternative grades (including Middle Eastern barrels) are improving, which could help sustain strong refining margins even in a scenario where Russian crude exposure were to reduce further.” Morgan Stanley also pointed to potential upside from strong refining margins and Venezuelan crude. Despite near-term pressure, brokerages expect 2026 to bring several triggers for the stock. “2026 is a year of catalysts for RIL stock outperformance and the path, as in every cycle, will see speed bumps,” Maheshwari said. Morgan Stanley has an overweight rating on the stock with a target price of Rs 1,847. Jefferies has maintained a Buy rating with a target of Rs 1,830, expecting growth to be led by the telecom business. Jefferies expects Jio to post 22% year-on-year revenue growth in FY27, supported by tariff hikes and growth in home broadband. The brokerage also expects margin expansion and strong growth in free cash flow. “In 2026, investor focus will pivot to JPL’s imminent listing, the timing and magnitude of further tariff hikes, and the scale-up of its FWA offering,” Jefferies said. Axis Capital said that the recent fall has made valuations more attractive, with the stock trading at a discount to its five-year average. While concerns around retail growth and crude sourcing may continue in the near term, brokerages said the company’s long-term outlook remains intact.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)