Reliance Industries valuation dips: Equirus sees 26% upside

Market context: a volatile session with Reliance in focus

Indian markets ended a volatile session on a relatively steady note after recovering from intraday lows. The rebound was aided largely by gains in Reliance Industries shares. Even so, investor caution remained visible amid elevated crude oil prices, rising global bond yields, and continued pressure on the rupee. In market commentary during the session, Reliance was described as one of the top positive contributors to the Nifty on the day. The stock was also noted as rising after three consecutive sessions of decline.

At the same time, intraday and end-of-day moves appeared tight, with one data snapshot showing Reliance marginally down 0.09%. That move broadly tracked the oil sector’s trend and slightly lagged the Sensex’s 0.04% decline in the same snapshot. The mixed tape underlined how closely Reliance has been trading with broader macro and sector signals in recent weeks.

Equirus upgrades Reliance to LONG from ADD

Equirus Securities said Reliance Industries’ risk-reward looks favourable at current levels. It upgraded the stock to LONG from ADD and set a September 2027 target price of ₹1,586. Equirus said this implies 26% upside from current levels.

The brokerage linked its upgrade to three broad points: medium-term underperformance in the stock, a near-term possibility of a positive earnings surprise in the oil-to-chemicals (O2C) business, and valuations nearing post-COVID lows. In its view, these factors together set up a potential re-rating.

What Equirus sees as re-rating catalysts

Equirus said a re-rating in Reliance shares could be driven by several operational and strategic contributors. It highlighted improving O2C profitability as one key driver, particularly if profitability trends improve from recent levels. The brokerage also pointed to value unlocking in Jio, implying that market attention could shift back to monetisation and structure-related developments.

Beyond O2C and Jio, Equirus cited resilient retail growth as a supporting factor. It also flagged the potential for contribution from new energy projects in the next few quarters. Taken together, the brokerage framed these as near-to-medium term triggers that could change investor positioning.

Valuation snapshot: forward P/E and EV/EBITDA compress

Equirus argued that valuations are at attractive levels for India’s most valuable stock. It noted that Reliance’s forward P/E has compressed to about 19x, compared with an average of about 21x. On enterprise value metrics, it said EV/EBITDA is around 9.9x, and is even below the minus 1 standard deviation band.

Equirus added that EV/EBITDA is nearing multi-year trough levels of about 9.6x. The brokerage’s framing is that valuation compression, when combined with potential operational improvement, can create scope for a re-rating.

How the stock has performed: lagging this year in some measures

Reliance has been a laggard so far this year in one comparison cited by the brokerage. Equirus said the stock has shed almost 20% year-to-date, versus an 11% decline in the Nifty 50 over the same period.

Another performance snapshot presented alongside the stock’s recent trading described a different set of benchmark comparisons using the Sensex. In that dataset, Reliance delivered a total return of 10.28% over the past year, compared with the Sensex’s 7.13%. But year-to-date, it showed Reliance down 11.13%, underperforming the Sensex’s 3.50% fall. The same snapshot also showed one-month and three-month declines of 11.45% and 6.18% for Reliance, versus the Sensex’s 2.88% and 2.57% drops.

Technical indicators and near-term trading levels

Technical indicators in the same market snapshot showed the stock trading above its 5-day moving average but below its 20-day, 50-day, 100-day and 200-day averages. That configuration was described as signalling a cautious near-term outlook amid mixed momentum.

Separately, a trading-level comment suggested holding positions while using a trailing stop loss around 1,335. While such levels are not fundamental drivers, they often reflect how traders manage downside risk during periods of volatility.

52-week high proximity and other quantitative markers

One data point noted that the stock was trading 2.26% below its 52-week high of ₹1,611.20, which was interpreted as a sign of resilience amid broader market fluctuations. A separate line also referenced a slight upward adjustment in a fair value assessment to ₹1,685.61 from ₹1,664.

These markers matter mainly because they influence investor behaviour around resistance, consolidation, and perceived valuation comfort zones, especially when a large-cap name is already widely owned.

Broker and research views: targets cluster around mid-₹1,500s to ₹1,700

Beyond Equirus, multiple brokerages and research platforms have published targets and rating changes in the material provided. JM Financial maintained a BUY rating with a target of ₹1,700, citing a projected 15-20% EPS CAGR over the next 3-5 years. Macquarie revised its 12-month target to ₹1,650 from ₹1,398 (as of October 16, 2025), projecting an 18.4% total shareholder return. Jefferies also has a target of ₹1,650, and Bernstein has an Outperform call with a target of ₹1,640. Prabhudas Lilladher upgraded the stock from Hold to Accumulate and raised its price target to ₹1,555 from ₹1,497.

Key numbers table: valuation, targets, and levels

Analysis: why the valuation debate matters for Reliance

Reliance’s underperformance has brought valuation back into focus, especially for a stock that often plays a central role in index direction. Equirus is effectively arguing that valuation compression, combined with possible improvement in O2C profitability and progress on Jio value unlocking, can shift the market narrative.

The broader market backdrop in the material provided also matters. Elevated crude oil prices, rising global bond yields, and rupee pressure were cited as factors keeping investors cautious. For Reliance, these variables can influence both sentiment and segment-level expectations, especially around energy-linked businesses.

Research commentary also showed that analyst confidence can change with visibility and valuation. The material referenced a downgrade to a ‘Hold’ Mojo Grade on 6 January 2026 with a Mojo Score of 62.0, and a prior upgrade to ‘Buy’ on 3 November 2025 with a Mojo Score of 70.0. While these are platform-specific indicators, they highlight how valuation and near-term earnings visibility shape market stance.

Conclusion: catalysts vs. macro headwinds

Equirus’ LONG upgrade puts the spotlight back on a potential re-rating in Reliance Industries, driven by O2C profitability, possible Jio value unlocking, resilient retail growth, and contributions from new energy projects. At the same time, the broader market environment described remains sensitive to crude prices, global yields, and currency moves. The next key signposts, based on the provided material, are quarterly earnings and any segment-level evidence that margins and profitability are improving, consistent with the catalysts highlighted by the brokerage.