Jefferies lifts RIL target after Rs 1 lakh crore fall, pins next leg of rally on Jio IPO, tariff hikes

A day after Reliance Industries (RIL) shares fell 4.4%, erasing Rs 94,000 crore in market value, global brokerage Jefferies raised its target price on the bluechip Nifty stock, citing a likely tariff hike at Jio and a potential IPO of the telecom arm as the next major re‑rating triggers for the conglomerate.

Jefferies has maintained its Buy rating on RIL and lifted the 12‑month price target to Rs 1,830 per share, rolling forward its sum‑of‑the‑parts valuation to March 2027, implying about 21% upside from the previous close of Rs 1,507.

The brokerage’s base‑case assumes 21% EBITDA CAGR at Jio, 14% at Retail, and 6% at the oil‑to‑chemicals (O2C) business over FY25–28, valuing core offline retail at 28x EV/EBITDA and India telecom at 15x on FY27–28 estimates.

Jefferies expects Reliance Jio to post 22% year‑on‑year (YoY) revenue growth and 28% EBITDA growth in FY27, driven by a 15% mobile tariff hike around June 2026 and continued strength in home broadband and fixed wireless access (FWA). The report flags an imminent listing of Jio Platforms Ltd in the first half of calendar 2026 as a pivotal event that could unlock equity value, with Jio’s standalone equity pegged at approximately $170 billion, based on a 15× EV/EBITDA multiple for March 2027.

On the consumer side, Jefferies sees Reliance Retail’s revenue rising about 16% in FY27, as store additions pick up following a network‑streamlining drive and revenue per square foot returns to double‑digit growth. EBITDA margin is expected to moderate slightly due to a higher contribution from lower‑margin grocery and JioMart. The brokerage highlights the spin‑off of the fast‑growing FMCG business—now clocking an annualised revenue run‑rate of around US$2.4 billion, with brands such as Campa Cola, Independence, and Lotus Chocolate—as a medium‑term value‑discovery story alongside the group’s new energy and data centre plans.

In the O2C segment, Jefferies forecasts about 5% EBITDA growth in FY27, as firm Singapore refining margins and tight refined‑product markets offset continued pressure from petrochemical overcapacity. The brokerage expects RIL’s refinery gross refining margin to stay broadly flat year‑on‑year in FY27, even as the shift away from discounted Russian crude and a gradual recovery in petrochemical spreads from 15‑year lows cap the upside.

Despite its constructive stance, Jefferies has trimmed FY27 and FY28 earnings per share estimates by about 2% each, mainly to reflect lower net interest income as capex and working capital needs rise in retail. Key downside risks flagged include weaker-than-expected tariff or subscriber trends at Jio, lower refining and petrochemical margins if China’s recovery disappoints, and higher-than-expected cash burn in e-commerce, which could compress valuation multiples for the consumer businesses.