Reliance Industries Ltd is Rated Hold

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for Reliance Industries Ltd indicates a balanced view of the stock’s prospects. It suggests that while the company maintains solid fundamentals and market presence, investors should exercise caution and consider holding existing positions rather than aggressively buying or selling at this stage. This rating reflects a comprehensive assessment of four key parameters: Quality, Valuation, Financial Trend, and Technicals.

Quality Assessment

As of 29 January 2026, Reliance Industries demonstrates a good quality grade. The company’s ability to service debt remains strong, with a low Debt to EBITDA ratio of 1.04 times, signalling prudent financial management and manageable leverage. Additionally, Reliance’s long-term growth trajectory remains healthy, with net sales growing at an annual rate of 17.69% and operating profit expanding at 17.98%. These figures underscore the company’s robust operational performance and its capacity to generate consistent revenue growth.

Valuation Perspective

The valuation grade is currently assessed as fair. Reliance Industries trades at an enterprise value to capital employed ratio of 2, which is modest compared to its peers, indicating a reasonable valuation discount. The company’s return on capital employed (ROCE) stands at 11.8%, reflecting efficient use of capital to generate profits. Over the past year, the stock has delivered a return of 12.40%, while profits have increased by 20.3%, resulting in a PEG ratio of approximately 1.1. This suggests that the stock’s price growth is broadly in line with its earnings growth, supporting the fair valuation rating.

Financial Trend Analysis

The financial trend for Reliance Industries is currently flat. The latest quarterly results for December 2025 show a slight decline in profitability, with PAT at ₹18,645 crore falling by 10.3% compared to the previous four-quarter average. Despite this, the company maintains a strong operational foundation, as evidenced by a high debtors turnover ratio of 24.77 times in the half-year period, indicating efficient receivables management. The flat financial trend suggests that while growth momentum has paused temporarily, the company’s fundamentals remain intact.

Technical Outlook

From a technical standpoint, the stock exhibits a mildly bullish trend. Recent price movements show a 1-day decline of 0.57% and a 1-month drop of 10.11%, reflecting some short-term volatility. However, the 1-year return remains positive at 12.40%, indicating resilience over a longer horizon. The stock’s market capitalisation of ₹18,90,554 crore makes it the largest company in the oil sector, representing 66.50% of the sector’s market value. This dominant position often lends technical support due to liquidity and investor interest.

Sector and Market Position

Reliance Industries commands a significant presence in the oil sector, with annual sales of ₹1,024,548 crore, accounting for 29.10% of the industry’s total. Institutional investors hold a substantial 39.37% stake, reflecting confidence from well-resourced market participants who typically conduct thorough fundamental analysis. This institutional backing can provide stability and support for the stock price during market fluctuations.

Implications for Investors

The 'Hold' rating advises investors to maintain their current positions while monitoring the company’s performance closely. The stock’s fair valuation and good quality metrics suggest it remains a solid core holding, but the flat financial trend and recent profit softness warrant caution. Investors should watch for signs of renewed earnings growth or valuation improvement before considering additional exposure.

Summary of Key Metrics as of 29 January 2026

• Mojo Score: 62.0 (Hold grade)


• Debt to EBITDA ratio: 1.04 times


• Net Sales growth (annual): 17.69%


• Operating Profit growth (annual): 17.98%


• PAT (Quarterly): ₹18,645 crore, down 10.3% vs previous 4Q average


• Debtors Turnover Ratio (Half Year): 24.77 times


• ROCE: 11.8%


• Enterprise Value to Capital Employed: 2


• 1-Year Stock Return: +12.40%


• PEG Ratio: 1.1


• Institutional Holdings: 39.37%


• Market Cap: ₹18,90,554 crore

Conclusion

Reliance Industries Ltd’s current 'Hold' rating by MarketsMOJO reflects a nuanced view of the company’s strengths and challenges. While the firm continues to exhibit strong quality metrics and a fair valuation, recent financial trends suggest a pause in growth momentum. Investors should consider this rating as a signal to maintain existing holdings and monitor developments closely, particularly any signs of earnings recovery or improved market conditions. Given its dominant market position and institutional backing, Reliance remains a key player in the oil sector, but the cautious stance recognises the need for prudence amid evolving market dynamics.

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