Posted on March 6, 2025, by Niftynews
Reliance Industries (RIL stock) has been under pressure, trading 37% lower from their all-time high of ₹1,608.80 reached on July 8, 2024. As of the most recent trading session on Thursday, March 6, 2025, RIL’s stock was seen rising by 1.9%, reaching ₹1,198 per share after Jefferies released a new report on the oil-to-telecom conglomerate. The report highlighted several factors that could help the stock recover in the near future.
Why Is RIL’s Stock Down 37% From Record High?
Over the past 12 months, RIL stock has fallen 21%, while the NIFTY50 index has slipped less than 1%. The stock has been underperforming due to a slowdown in the retail business and subdued earnings from the oil-to-chemicals (O2C) division. Jefferies pointed out that the pessimism surrounding RIL stock is overly extreme, especially considering the company’s strong fundamentals.
The company retail business was hit by a reduction in workforce in FY24, with major retailers, including RIL’s retail division, Titan, Raymond, and others, reducing their employee count by approximately 52,000 people. This was part of a broader slowdown in store expansion in response to declining demand, which hurt Reliance Industries share price.
Despite these challenges, Jefferies sees potential for a strong recovery in RIL stock with several positive catalysts in the pipeline.
3 Key Factors That Can Boost RIL Stock Price
- Retail Segment Recovery
Jefferies is optimistic about the future of RIL’s retail segment, predicting that a combination of same-store sales growth (SSG) and expansion will drive a 15% growth in retail by FY26. Despite the recent struggles, this rebound in retail should provide a significant boost to Reliance Industries shares. The retail sector’s recovery is anticipated to help the company achieve stronger earnings and improved stock performance. - Tariff Hike in Jio
Another potential trigger for Reliance Industries stock is the tariff hike in Jio. As the country’s largest telecom operator, Jio’s ability to raise tariffs could significantly impact its profitability, leading to an increase in overall revenue. Jefferies highlighted this potential growth driver, suggesting that higher tariffs could boost Jio’s earnings, which in turn would support the overall performance of RIL stock. - Potential Jio Listing
The possibility of a Jio listing is also a key factor for RIL’s future growth. As one of India’s most valuable tech companies, a potential listing would unlock significant value for the company and its shareholders. It would likely generate a surge in investor interest in RIL’s stock and could help in pushing the stock price higher in the long run.
RIL Q3 FY25 Results: Solid Performance Amidst Challenges
RIL reported a 7.4% rise in net profit during the December quarter of FY25, driven by the recovery of its retail business, a surge in telecom earnings, and stable performance from its O2C business. The consolidated net profit stood at ₹18,540 crore, or ₹13.70 per share, in Q3 FY25, compared to ₹17,265 crore, or ₹12.76 a share, in the same period last year. This represents a solid growth trajectory for the company, even in a challenging environment.
In addition to the profit increase, RIL’s EBITDA rose by 7.8% to ₹48,003 crore, showing strong operational performance despite a rise in finance costs due to higher debt. The O2C business, including the refineries at Jamnagar, saw a rise in EBITDA by 2.4% to ₹14,402 crore. The company’s fuel retail business, through its joint venture Jio-bp, recorded the highest ever quarterly sales in both petrol and diesel.
Conclusion: Will RIL Stock Recover?
Despite trading 37% lower than its record highs, Reliance Industries stock still presents an attractive investment opportunity due to the strong recovery prospects in its retail segment, potential tariff hikes in Jio, and the possible listing of Jio. Jefferies believes that the current market capitalization of RIL is undervalued compared to its future growth potential, making RIL stock a potential rebound candidate.
For investors looking to capitalize on RIL’s future growth, this moment could present an opportunity to invest in a stock poised for recovery, driven by multiple factors that could lead to significant stock price gains in the near future.
Stay tuned for more updates on Reliance Industries share price and stock performance.
