Reliance Share Rises 5%, M-Cap Jumps Rs 88,995 Cr In 2 Days; Why Is RIL Stock Up In Middle East War? Buy?

India's billionaire Mukesh Ambani-backed Reliance Industries (RIL) has shown resilience towards the crisis in Middle East that is expected to impact gravely to global oil and gas supply. Reliance, the largest company in terms of market cap in India, soared by nearly 5% in just two days. The heavyweight company's market cap also climbed nearly Rs 88,995 crore as well. The current outlook for Reliance is positive as analysts believe the company will not be impacted negatively even when crude oil and LNG prices are increased.

Reliance Industries Share Price:

After market hours on March 6th, Reliance ended at Rs 1405.20 apiece, up by Rs 15.40 or 1.11%. At the closing price, Reliance's market cap is at Rs 19,01,583.05 crore.

The upside on March 6th in RIL could be attributed to the US' announcement of a temporary waiver of 30 days to allow India to buy Russian oil currently stranded at sea, as the Strait of Hormuz shutdown by Iran has led hundreds of ships being stranded.

Yesterday, the stock gained nearly 4%, leading benchmarks Sensex and Nifty to upside as well.

Reliance stock price stood at Rs 1,345.55 apiece two days ago. From this level, they have gained by nearly 4.7%, with market cap rising by Rs 88,994.09 crore as of now.

Despite the latest rally, Reliance's month-on-month performance is down by 3%. Analysts pointed out that RIL's stock fell 4% in the early days of the week and had an 8% drop in the last month. This correction they believe is overdone.

The latest rally and recovery of some losses is due to positive outlook. Analysts at JM Financial believe that Reliance's won't be negatively impacted by the recent spike
in crude and LNG prices.

Reliance Industries Share Price Recommendation:

Analysts believe that Reliance could see near-term benefits from the Middle East crisis due to jump in diesel cracks to $ 35-42/bbl in the last 2 days (~$20/bbl earlier) as the diesel yield for RIL's refinery is a high 40-50%; assuming diesel crack sustains at ~$30/bbl, RIL's GRM could rise by $ 4-5/bbl. Every $1/bbl rise in RIL's GRM on an annualised basis results in an increase in its annual EBITDA by Rs 45billion or 2.2% and increase in valuation by Rs 29/share of 1.7%.

Also, Reliance benefits from due to likely rise in its petchem margin as petchem product prices are likely to rise along with crude price, while its petchem feedstock cost is unlikely to rise much as it has limited dependency on crude-linked naphtha. RIL's petchem feedstock breakdown is approximately: i) 25% ethane; ii) 50% off-gases and iii) and only 25% crude-linked naphtha.

"The correction in RIL seems largely due to FII-related selling (FII holding at 21.1% at end-Dec'25 versus peak of 28.3% at end-Mar'21). At CMP, RIL is trading near our bear-case valuation of ~Rs 1,275/share," analysts said.

Hence, they have reiterated their buying stance on Reliance with target price at Rs 1,730.

Analysts said the Buy stance is on comfortable valuations after the recent correction, as share price adequately factors concern around near-term weakness in retail business EBITDA growth on account of ramp-up in the quick commerce business.

But they have not discounted 15-16% EBITDA-compounding story in Digital business over the next 2-3 years driven by 10-11% ARPU CAGR. Hence, they added, "we expect 14-16% EPS CAGR for RIL over the next 3-5 years. Key triggers are Jio's IPO in the next few months (assuming SEBI norms for large IPOs are notified in the next few weeks) and likely telecom tariff hike post that."

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