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RIL share price target.

International brokerage firm Morgan Stanley has said that the performance of Mukesh Ambani-led Reliance Industries (RIL) in every sector will look even better in 2026. The company's energy, consumer and telecom verticals are moving towards becoming free cash flow-positive for the first time. For this reason, the brokerage has maintained its overweight rating on the stock and has set a target price of Rs 1847, which indicates an upside of about 20%.

'Golden Age' of fuel refining

According to Morgan Stanley, fuel refining has become RIL's most underestimated but most profitable vertical. The expansion of fuel retail network is providing strong free cash flow and additional returns to the company. Current margins are around $14 per barrel, about 1.5 times higher than mid-cycle levels. RIL is likely to post further profit in FY27FY28 due to slowing growth in global fuel capacity.

Improvement in retail business

Reliance Retail's consumer business has grown rapidly in the last few years. This vertical trade, which is equivalent to ITC's FMCG business, is based on general merchandise. RIL recorded 42% quarterly growth in the September 2025 quarter due to expansion of quick commerce and dark stores network through JioMart. Morgan Stanley believes that recovery of up to 17% CAGR in retail is possible during FY25FY28.

Telecom free cash flow positive for the first time

RIL's telecom vertical has become free cash flow positive for the first time. Subscriber growth, lower capital expenditure and steady growth in ARPU have led to 18% growth in EBITDA and earnings. Telecom ROCE remained at around 7% due to strong performance in both digital and wireless sectors.

Signs of recovery in chemicals

The industry's margins are becoming stable due to the slow pace of China's capacity growth and the closure of old chemical factories. Despite the current down-cycle, RIL's chemicals vertical is expected to achieve 1015% margin recovery by the end of 2026.

Current status of RIL

RIL is pricing on its mid-cycle earnings. The stock is trading at more than 60% discount to peer multiples for each division. Morgan Stanley argues that all the company's growth engines together can add more than $50 billion to RIL's net asset value.