Current Rating Overview
MarketsMOJO’s current 'Hold' rating for Reliance Industries Ltd indicates a balanced outlook for investors. This rating suggests that while the stock remains a significant player in its sector, it may not offer substantial upside potential relative to its current valuation and market conditions. Investors are advised to maintain their positions but exercise caution before adding further exposure.
Quality Assessment
As of 20 February 2026, Reliance Industries Ltd maintains a strong quality grade, reflecting its robust operational capabilities and market leadership. The company demonstrates a strong ability to service its debt, with a low Debt to EBITDA ratio of 1.04 times, signalling prudent financial management and manageable leverage. Additionally, Reliance’s net sales have grown at an annual rate of 17.69%, while operating profit has increased by 17.98%, underscoring consistent long-term growth.
Valuation Perspective
The valuation grade for Reliance is currently assessed as fair. The stock trades at an enterprise value to capital employed ratio of 2, which is modest compared to its peers. This valuation reflects a discount relative to the sector’s historical averages, offering some appeal to value-conscious investors. The company’s return on capital employed (ROCE) stands at 11.8%, which supports the fair valuation stance. Furthermore, the PEG ratio of 1.1 indicates that the stock’s price is reasonably aligned with its earnings growth prospects.
Financial Trend and Profitability
Financially, Reliance Industries Ltd shows a flat trend in recent quarters. The latest quarterly results for December 2025 reveal a decline in profit after tax (PAT) by 10.3% compared to the previous four-quarter average, with PAT reported at ₹18,645 crore. Despite this short-term dip, the company’s profits have risen by 20.3% over the past year, reflecting underlying strength. The debtors turnover ratio remains healthy at 24.77 times, indicating efficient management of receivables.
Technical Outlook
From a technical standpoint, the stock exhibits a mildly bullish trend. Recent price movements show a modest 0.3% gain on the day of 20 February 2026, with a one-month return of +1.55%. However, the stock has experienced some volatility over the past three months, with an 8.66% decline, and a year-to-date return of -9.84%. Over the last year, the stock has delivered a total return of 14.76%, signalling resilience despite short-term fluctuations.
Market Position and Institutional Interest
Reliance Industries Ltd remains the largest company in the oil sector, with a market capitalisation of approximately ₹19,09,161 crore, representing 66.07% of the sector’s total market cap. Its annual sales of ₹1,024,548 crore account for nearly 29% of the industry’s revenue, underscoring its dominant position. Institutional investors hold a significant 39.37% stake in the company, reflecting confidence from sophisticated market participants who typically conduct thorough fundamental analysis.
This week's disclosed pick, a Large Cap from NBFC, comes with precise Target Price and analysis. Check if you're positioned right for this opportunity!
- - Precise target price set
- - Weekly selection live
- - Position check opportunity
What the 'Hold' Rating Means for Investors
The 'Hold' rating reflects a cautious stance, suggesting that Reliance Industries Ltd currently offers a balanced risk-reward profile. Investors holding the stock may consider maintaining their positions to benefit from the company’s steady cash flows and market dominance. However, the rating advises against aggressive accumulation at present, given the fair valuation and recent flat financial trends. This approach helps investors avoid overpaying for growth that may be temporarily subdued.
Summary of Key Metrics as of 20 February 2026
Reliance Industries Ltd’s Mojo Score stands at 62.0, down from 70 previously, aligning with the 'Hold' grade. The stock’s recent returns include a 14.76% gain over the past year, despite a year-to-date decline of 9.84%. The company’s strong debt servicing ability, healthy sales growth, and dominant market share support its quality grade. Meanwhile, valuation remains fair, and technical indicators suggest mild bullishness, though recent volatility warrants a measured approach.
Investor Considerations
For investors, Reliance Industries Ltd represents a large-cap stalwart with a solid foundation and sector leadership. The current 'Hold' rating encourages a watchful stance, balancing the company’s strengths against recent earnings softness and valuation considerations. Those seeking exposure to the oil sector may find Reliance a core holding, but should monitor upcoming quarterly results and sector dynamics closely to reassess the stock’s potential.
Outlook
Looking ahead, Reliance Industries Ltd’s prospects will depend on its ability to sustain growth in sales and profits, manage costs effectively, and capitalise on its market position. Investors should also consider broader oil sector trends and macroeconomic factors that could influence performance. The current rating reflects these complexities, offering a prudent recommendation that aligns with the company’s present fundamentals and market environment.
Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today
