Reliance’s FY28 growth story rests on 5 triggers. New energy is just one

While billionaire Mukesh Ambani-led conglomerate Reliance Industries Ltd’s sharp rally this week is hinting at a possible breakout, the stock’s next growth cycle will depend less on its latest quarter and more on how its newer businesses perform over the next 18 months.

After spending most of the time sulking in a corner as one of the worst performing bluechip stocks in 2026, the company’s shares staged a rare 12% rally on Monday after a strong earnings reaction, but the bigger investment question now is whether Reliance can convert a record oil-to-chemicals performance into a broader FY28 growth story. Brokerages see five potential triggers: sustained O2C profitability, a Retail recovery, Jio monetisation, new energy earnings and the scaling up of consumer and media businesses.

The optimism is reflected in broker targets. Goldman Sachs sees 58% upside, while CLSA’s ₹1,800 target implies 55% upside. Jefferies, Ambit and JPMorgan have targets of ₹1,710, ₹1,651 and ₹1,675, respectively. But the range is wide as Citi has cut its target to ₹1,490 and Nomura to ₹1,560, pointing to continuing risks in Retail and the potential moderation of refining margins. Here are 5 triggers that can help RIL shares sustain rally in FY28:


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1) O2C must remain strong

Reliance’s oil-to-chemicals business delivered its strongest-ever quarter, with EBITDA rising 48% sequentially to ₹25,200 crore. The performance was driven by elevated transportation fuel cracks, better petrochemical margins, higher throughput, flexible crude sourcing and improved product placement.

CLSA expects global downstream tightness to continue for at least two to three more quarters and said Reliance now guides for FY27 O2C EBITDA of more than $8.5 billion. Jefferies expects O2C profitability to remain elevated during the winter, citing damage to refining infrastructure in the Middle East and Russia.

That makes O2C the first major FY28 trigger but also a risk. Citi warned that higher refined product exports from China, easing diesel restrictions in South Korea and a possible release of European diesel stocks could cap diesel and jet fuel cracks. Goldman Sachs also expects refining margins to soften moderately in the next quarter.

The question is whether Reliance can retain its feedstock and logistics advantages even as the global commodity cycle normalises.

2) Retail needs to turn from investment to growth

Reliance Retail remains the biggest drag on the earnings narrative. EBITDA declined around 10% year-on-year, while margins contracted as the company invested in JioMart, dark stores, technology and digital commerce.

The festive season shifting into the third quarter also hurt the reported performance. But brokerages say the weakness is partly strategic. BofA Securities said Reliance Retail is using its offline store cash flows to fund digital commerce expansion, while investments made in FY27 could deliver benefits across FY28 and FY29.

CLSA described FY27 as a “reset year” for Retail as the company consolidates its offline business and strengthens its digital and quick commerce operations. The brokerage expects a material jump in Retail EBITDA over the following two years.

Without stronger Retail growth and margins, Reliance’s transition from an energy-led conglomerate to a consumer-led platform will remain incomplete.

3) Jio’s pricing power could accelerate growth

Jio delivered steady operational growth, adding 9.1 million subscribers during the quarter and lifting average revenue per user to ₹219. Telecom EBITDA rose 5% sequentially, with margins expanding to 51.6%.

The immediate catalyst is a possible industry-wide 15% mobile tariff hike in December 2026. Ambit identifies the tariff increase as one of Reliance’s primary near-term earnings triggers, while the higher ARPU provides a base for stronger earnings in FY28.

Jio’s growth story is therefore moving from subscriber acquisition to monetisation. The company has already built scale. The next question is how much additional revenue it can generate from its existing customer base without damaging growth.

4) New energy moves from promise to earnings

New energy is the most obvious FY28 trigger, but it is not the only one. Brokerages say execution is progressing faster than expected, with production of HJT solar modules and battery storage capacity moving ahead of earlier expectations.

BofA expects new energy to begin contributing to earnings from FY28. CLSA also identifies the start of new energy capacity and monetisation in FY28 as a major catalyst.

Reliance has made large investments in solar, energy storage, green hydrogen and fuel cells. The critical shift in FY28 will be from capital expenditure and commissioning to revenue and profitability.

That transition could give investors a new valuation framework for Reliance but only if the businesses scale commercially and generate returns on capital.

5) FMCG and media add optionality

Reliance’s consumer products business is also gaining traction. Jefferies said FMCG revenue rose 60% year-on-year to about ₹8,300 crore, supported by Campa Cola and essential products. The company has also entered the dairy category with ice creams.

JioStar remains another source of potential upside. Its revenue increased 10% year-on-year, supported by subscription and digital advertising growth, although EBITDA declined.

These businesses are not yet the primary earnings drivers. But they expand Reliance’s consumer ecosystem and could become more meaningful contributors as Retail and digital platforms mature.

The FY28 test

Reliance’s FY28 growth case rests on a delicate hand-off. O2C must remain resilient enough to fund the transition, Retail must recover after its investment phase, Jio must demonstrate pricing power, new energy must begin contributing and FMCG and media must scale.

Ambit forecasts a 22% FY26-FY28 earnings per share CAGR. Goldman Sachs expects earnings to rise as energy profitability and newer businesses improve. But Citi remains cautious because strong O2C earnings may not fully offset continued Retail weakness or a normalisation in commodity margins.

While the market has already rewarded Reliance for its latest earnings beat, the bigger re-rating, however, will depend on whether the five FY28 triggers begin to work together.

(Disclaimer: This article has been written by Nikhil Agarwal, who is not a SEBI-registered Research Analyst or an Investment Adviser. Nikhil Agarwal and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here)