Reliance Industries shares poised for earnings upgrades, re-rating in every quarter of 2026: Morgan Stanley

Brokerage firm Morgan Stanley has raised its price target on Nifty 50 heavyweight Reliance Industries Ltd

. in a research note released on Wednesday, December 17, assigning one of the highest targets on the Street for the stock.

The foreign brokerage has reiterated its 'Overweight' rating on RIL and increased the price target to ₹1,847 per share from ₹1,701 earlier. The revised target implies a potential upside of about 20% from Tuesday's closing price.

Morgan Stanley said it has turned more constructive on the stock heading into 2026, citing three key building blocks, an estimated $50 billion in value creation and multiple catalysts expected to play out on a quarterly basis.

The brokerage described the current phase as the company's fourth monetisation cycle, during which all business verticals are expected to turn free cash flow positive, allowing RIL to redeploy capital into new growth opportunities.

Since the Covid period, RIL has invested more than $80 billion, and these investments are expected to start delivering returns from 2026 onwards.

It said that this is the company's fourth monetisation cycle over the past 30 years, with energy, consumer and telecom businesses all expected to generate positive free cash flows for the first time.

Morgan Stanley said this shift is critical for a re rating of the stock. It added that RIL outperformed the Sensex by 35 percentage points during its previous two monetisation cycles between 2017 and 2019, and again between 2020 and 2021.

According to the brokerage, the company is now redeploying free cash flows into new growth areas such as artificial intelligence infrastructure, energy storage and polysilicon. It also pointed out that the balance sheet is deleveraging as spectrum related and creditor liabilities gradually unwind.

Morgan Stanley has raised its estimates for earnings before interest, tax, depreciation and amortisation, as well as earnings per share, by 1 to 4% for FY26 to FY28.

The brokerage expects a re rating and earnings upgrades to be triggered in every quarter of 2026.

It sees a refining up cycle in the first quarter of 2026, an increase in average revenue per user along with retail topline growth in the second quarter, a ramp up in new energy businesses in the third quarter, and a recovery in chemicals confidence by the fourth quarter.

Morgan Stanley also said that underwriting of RIL's artificial intelligence data centre capacity by US hyperscalers should improve confidence around net asset value accretion from artificial intelligence investments.

Of the 37 analysts tracking Reliance Industries, 35 have a 'Buy' recommendation on the stock, while two maintain a 'Sell' rating.

Shares of Reliance Industries ended Tuesday's session 1% lower at ₹1,540.70. The stock is currently trading about 2.5% below its recent high of ₹1,581.30.

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