Stock to Buy: Brokerage sets Buy rating on RIL shares, provides target price

New Delhi: Reliance Industries announced excellent financial results for the April-June quarter of the current financial year, FY26. However, investors are worried as the decline was observed in the company's oil and gas business. The European Union (EU) imposed the sanctions on the company's crude oil business that it imports from Russia. The sanctions have affected the company's business prospects. However, as per the report of brokerage firm Emkay Research, this is a good opportunity to invest in RIL, as the stock is available at a discounted price.

Emkay Research has maintained a BUY rating on Reliance Industries (RIL) shares. According to the report, the target price has been set at Rs 1,600 as against the current price of Rs 1,390, which shows an upside potential of about 15%. Additionally, if the company separates its retail and telecom businesses in the future, then existing shareholders are set to benefit in the long run.

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Reliance Oil and Retail Business

At present, RIL investors are worried about EU sanctions, as the major source of revenue for Reliance's oil business is its exports to the EU. However, post the EU sanctions, Reliance has increased its oil purchases from Gulf countries to diversify its supply chain. In such a scenario, the hope of stability in Reliance's oil and gas and oil-to-chemicals segment has increased. In such a situation, the company is fully prepared to deal with the biggest concern of investors.

RIL Business Diversification

Reliance Industries is rapidly undergoing diversification of its business. On one hand, the company's telecom and retail business has seen strong growth, while simultaneously the company is expanding its business in the energy sector and new energy domains. The company's giga factory will be ready in the coming 4-6 quarters. Additionally, the company will start production of renewable energy, which will prove to be profitable in the long term.

The company's share closed at Rs 1390.30 apiece on the BSE on July 31, 2025. The company's EBITDA for FY26 is estimated to be Rs 1,868 billion, and PAT is estimated to be Rs 803 billion for FY26. Additionally, the current P/E ratio is 24.1x and EV/EBITDA is 11.2x, which could become more attractive in the coming years. In such a situation, the brokerage believes that the current decline is a golden opportunity to invest. If the stock gains momentum from here, it can make a long rally.