Brokerages give thumbs up to RIL post the 49th AGM, peg Jio valuation at $117-$127 billion

Motilal Oswal Financial Services expects Reliance Jio (RJio) to remain the biggest growth driver for RIL

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Brokerages gave a big thumbs up to Reliance Industries Ltd (RIL) following the 49th annual general meeting on Friday, wherein the conglomerate announced launching India’s largest initial public offering (IPO) by taking Jio Platform Ltd (JPL) public, expanding manufacturing capabilities, investing in the AI ecosystem and new energy commissioning milestones.  Brokerages have also pegged Jio Platform’s valuation between $115-130 billion, which is in the bandwidth of the m-cap of its biggest competitor, Bharti Airtel. 

Domestic brokerage Motilal Oswal Financial Services (MOFS) expects Reliance Jio (RJio) to remain the biggest growth driver for RIL (digital services likely to contribute 80% of RIL’s incremental earnings before interest, taxes, depreciation, and amortisation (EBITDA) over FY26-28), with an 18% reported EBITDA compounded annual growth rate (CAGR) over FY26-28. 

“We value RJio on a discounted cash flow (DCF) implied 11.5x Mar’28E EV/EBITDA to arrive at our enterprise valuation of Rs 11.3 lakh crore ($120billion) for RJio (Wireless + Home broadband). We assign Rs 74,000 ($8billion) valuation to other non-mobility offerings under JPL to arrive at Rs 12 lakh crore (or $128 billion) enterprise valuation.  Factoring in net debt, our equity valuation for JPL stands at Rs 10.7 lakh crore ($114billion),” said MOSF in a report. RJio standalone accounted for 88%/95%/94% of JPL’s consolidated revenue/reported EBITDA/attributable profit after tax (PAT) in FY26.

MOSF reiterated its BUY rating on RIL with an unchanged target price of Rs 1,655. It added that value unlocking through the impending JPL IPO, ramp-up of quick-commerce offerings under Reliance Retail, higher spreads in the O2C business, and optionality from faster ramp-up of FMCG, AI, Datacenter, and New Energy remain key triggers for the stock.

Among global brokerages, Jefferies maintained a ‘Buy’ rating on RIL with a target price of Rs 1,675, while Nomura expected the stock to hit the Rs 1,640 level. CLSA maintained its "outperform" rating on RIL with a price target of Rs 1,800, which is among the highest price targets on the street for the stock. RIL shares settled at Rs 1,326.55, up 1.31% on Monday. During the day, it rallied 2.75% to a high of Rs 1,345.45 on the BSE. 

Nomura estimated Jio's implied valuation at $117-127 billion and pointed to Reliance's expanding presence in AI and clean energy. The brokerage expects the group's new energy business to start generating revenue from FY27. On the conglomerate's main oil-to-chemical (O2C) business, Nomura said that Reliance continued to invest in higher-value downstream integration, including a 3 million tonne PTA plant at Dahej, a 1.2 million tonne PVC plant at Nagothane and a carbon-fibre facility at Hazira.

Nuvama Institutional Equities, meanwhile, sees limited gains for RIL shareholders post listing of the company. "While premium valuation is likely, Reliance Industries shareholder gains may be limited by holding company discount," it said in a report. 

Jio Platforms, the digital service arm of billionaire Mukesh Ambani’s Reliance Industries, is expected to launch a $4 billion or Rs 37,700 crore IPO in the near future, making it the largest initial share sale in India’s capital market history. According to the filed DRHP on Friday, Jio’s IPO is structured as a primary issuance of 27 crore equity shares, representing approximately 2.9% of post-issue share capital.