Reliance Shareholders Set for Quarterly Gains in 2026: Morgan Stanley Gives Optimistic Outlook

Reliance Industries Limited (RIL) has delivered good news for its 44 lakh investors. According to brokerage firm Morgan Stanley, the effects of the company’s $80 billion investments will begin to show in 2026, with positive results expected across all major businesses – energy, consumer, and telecom – for the first time.

Morgan Stanley has maintained an “overweight” rating on Reliance shares, setting a target price of ₹1,847, nearly 20% higher than the current market price of ₹1,541.80 per share, which closed flat in the previous session.

Quarterly Gains Expected Across Segments

Reliance, which is undergoing its fourth major transformation in 30 years, is expected to see its share price rise quarterly in 2026:

• Q1: Refining business to show strong growth.
• Q2: Telecom ARPU (average revenue per user) and retail sales expected to increase.
• Q3: New energy projects to gain momentum.
• Q4: Chemical business to show improvement.

Fuel Refining Business in a “Golden Phase”

Morgan Stanley notes that Reliance’s fuel refining segment has been undervalued. It continues to generate strong free cash flow (FCF) and is expanding its fuel retail network. The firm expects an increase of $7–10 billion in net asset value (NAV), with refining margins around $14 per barrel, approximately 1.5 times the mid-cycle level, marking the fourth consecutive strong year in 2026.

Retail Business Growth

Reliance’s consumer brands have grown rapidly over the past three years, now comparable to ITC’s FMCG business. Over 75% of sales come from general merchandise. Quick commerce via JioMart, which saw 42% growth in Q2 FY26, supports the retail expansion. The retail segment is projected to grow 17% annually from FY25 to FY28.

Telecom: Positive Free Cash Flow

For the first time, Reliance Jio’s telecom business is expected to generate positive FCF, driven by lower capital expenditure and strong subscriber growth. Despite no tariff hikes in the last two years, ARPU is set to increase 9% annually, boosting EBITDA and overall earnings by 18%.

Chemicals Business Recovery

Following China’s reduced petrochemical capacity additions and shutdowns of old plants, global industry margins are stabilizing. Reliance’s chemical margins had fallen over a third during the down-cycle, but Morgan Stanley expects a 10–15% recovery by the end of 2026, potentially exceeding market expectations.