CLSA Turns Bullish on Reliance Industries

Brokerage firm CLSA has raised its price target on Reliance Industries to ₹1800 on the back of the long-awaited Jio listing. In a note dated Tuesday, January 21, the brokerage said the stock could see an upside of about 29% from its Tuesday’s closing levels.

CLSA is now the eighth among the 37 analysts tracking Reliance Industries to project such an upside. The call comes at a time when the stock has struggled to sustain momentum despite steady earnings and a series of structural moves across businesses.

Jio Listing as Key Trigger

The brokerage flagged the potential listing of Reliance Jio by mid-2026 as a key event that could shape investor perception over the next year. Market participants said the conversation regarding listing has returned as cash flows at the telecom arm continue to strengthen.

CLSA has valued Jio at an enterprise value of $161 billion for March 2027, which could rise to $190 billion by March 2028. These estimates are based on a 15% premium to global peers. The brokerage said it prefers using free cash flow as the most appropriate metric when comparing Jio with international telecom companies, rather than earnings multiples alone.

Cuts to New Energy, Retail Valuations

However, not all parts of the Reliance story saw upgrades. CLSA said it has trimmed valuation multiples for the company’s new energy business. While the long-term opportunity remains large, analysts appear to be factoring in execution risks and longer gestation periods before returns show up in earnings.

The brokerage also reduced its valuation for the retail business. CLSA now values the segment at an implied 10% discount to the equity valuation at which stake sales were done more than two years ago. Those transactions set a high benchmark for the business, which has since undergone restructuring and portfolio changes.

Despite the cut, CLSA said the retail arm could still offer upside optionality. Potential growth in quick commerce, FMCG products and the media business could add value over time. Market participants said these segments are still evolving and may not be fully reflected in near-term earnings.

December Quarter Performance

Reliance Industries posted consolidated revenue of ₹2.65 lakh crores for the December quarter, compared with ₹2.55 lakh crores in the previous quarter. The sequential growth was led by the oil-to-chemicals (O2C) business, which benefited from stable refining margins and higher volumes.

The retail business reported 8.4% growth during the quarter. According to the company, the performance was supported by the festive season, GST rate rationalisation and the demerger of the consumer products portfolio. Analysts said the demerger has helped sharpen focus on margins and brand-led growth within retail.

Potential Impact on Investors

CLSA’s call could reinforce the bullish view on the stock. A Jio listing, even if still some distance away, may serve as a psychological anchor for the stock and revive interest among global investors. For investors, CLSA's prediction can further strengthen Reliance's position on India's consumption, connectivity and energy transition themes.

Sources:

CNBC
Moneycontrol