You are right that at least two leading institutional brokers, CLSA and Edelweiss, have downgraded Reliance Industries as they expect the rally to be over in the medium term. According to Edelweiss, some of the major triggers that rallied Reliance like deleveraging, asset monetization and digital foray have already played out. Edelweiss downgraded the stock from Buy to Hold.

The other large institutional broking outfit, CLSA, has downgraded the stock from Outperform to Buy. They have set a market capitalization valuation outer limit of $220 billion for Reliance Industries in the medium term. As the market cap of RIL is already closing in on $200 billion, there is only limited upsides in the stock according to CLSA.

There is a word of caution here. Most analysts went horribly wrong in judging the outcome of Reliance’s efforts on telecom, monetization and deleveraging. It must be said that there is hardly an analyst on the street who was able to predict the full impact of Reliance’s efforts over the last four years. So take these downgrades with a pinch of salt.