Reliance Industries Could Gain $20 Billion Boost From China's Industrial Reforms, Says Morgan Stanley

Reliance Industries rose over 2% on Tuesday after Morgan Stanley said the conglomerate stands to gain from China's push to curb industrial overcapacity, as well as Reliance's own restructuring efforts.

According to a Bloomberg report, Morgan Stanley noted that Reliance stands out as the largest winner from China's“anti-involution” policies across energy and solar supply chains. Simultaneously, Reliance is undertaking similar efficiency-focused reforms in its consumer businesses. The term“anti-involution” in China refers to efforts to counter intense, unproductive competition.

“Reliance is going through self-anti-involution in consumer businesses and benefiting from China's anti-involution drive in multiple ways – both of which are not priced in,” the note read.

This comes at a crucial period for Reliance as it builds a fully integrated solar supply chain in India. Overcapacity in China has led to rationalization in polysilicon production, potentially reducing Reliance's energy costs by 40% by 2030 and increasing new-energy earnings contributions to 13% by 2027.

Morgan Stanley estimates these shifts could add $20 billion in net asset value and boost earnings forecasts for FY28 by 17%.

The brokerage maintained its“overweight” rating on Reliance and raised the 12-month price target to ₹1,701 from ₹1,602.

Streamlining Operations

Reliance Industries announced multiple new developments spanning digital, retail, and energy segments at the Annual General Meeting (AGM) on Friday. 

Chairman Mukesh Ambani confirmed that Reliance's telecom arm Jio will file for its initial public offering (IPO) in the first half of 2026. He also announced the launch of Reliance Intelligence, a new AI-focused subsidiary aimed at building green energy-powered data centres and delivering artificial intelligence solutions at scale. 

Separately, Jio Infocomm Chairman Akash Ambani unveiled JioPC, a cloud-powered virtual computer, along with a suite of other AI-enabled products and platforms designed to strengthen Reliance's technology ecosystem.

Reliance: Trading Strategy

While technicals flash caution as a falling wedge pattern takes shape, upcoming triggers such as the Jio IPO and robust retail/FMCG expansion could fuel the upside, with a 12-month target range of ₹1,640 - ₹1,850, according to SEBI-registered analyst Palak Jain.

Retail sentiment for Reliance turned 'extremely bullish' on Stocktwits a day earlier. It was 'bearish' earlier. Retail chatter was 'high'. It was also among the top trending stocks on the platform.

The stock has gained 12.5% year-to-date.

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