Mumbai: The Reliance Industries Ltd (RIL) stock seems to have much steam left, even after a stellar performance in 2017-18 when it posted the best returns in eight years.

RIL share price has gained 11.29% in 2018-19, even before the first quarter has ended. This comes on the back of a 33.84% gain in 2018, the best returns since its surged 41.11% in 2009-10.

For the calendar year-to-date, however, the stock is up mere 6.67%, given the dismal performance in the first three months of 2018.

RIL shares touched a record high of 1,010.70 on 27 April, and have erased 2.8% ever since to close at 982.45 on Monday.

For the three months ended 31 March, RIL had reported its highest quarterly net profit of 9,435 crore, beating analysts’ estimates.

However, the performance of the telecom arm, Reliance Jio Infocomm Ltd, remained subdued with the company posting a mere 1% growth in net profit on a sequential basis as the ongoing tariff war, which Reliance Jio triggered, brought down its average revenue per user (ARPU) to 137 in the March quarter from 154 a quarter earlier.

However, analysts believe the impressive subscriber growth was a key positive for Reliance Jio.

“...we see the stars aligning for it to break toward our PT (price target of 1,241) as diesel, polyester and retail margins step up to a new normal, telecom subscriber growth sets new benchmarks and capex unwinds," Morgan Stanley said in a 10 June note.

“This should energise a front-loaded 80% EBITDA (earnings before interest, taxes, depreciation and amortization) rise in three years," Morgan Stanley analysts, who have an overweight rating on the stock said.

There was more conviction among analysts than a year before for RIL stock.

According to data from Bloomberg, currently, 31 analysts have a buy or overweight rating on the stock, four have a hold or neutral while five have a sell or underweight rating.

In comparison, 23 analysts had a buy or overweight rating on the stock a year ago, while 12 had a hold or neutral, while three rated it a sell or underweight.

“The capex cycle of RIL is now towards the end, and most of the petchem plants are up and running. Petcoke gasification should be operational in the first half of FY19," said Sudeep Anand, head of institutional research, at IDBI Capital Market & Securities Ltd.

According to Anand, once all these plants kick start, it will add to the GRMs (gross refining margins) by $2-3 per barrel, given the firm global gas prices.

“Performance of Reliance Jio is quite encouraging. The key thing is subscriber growth. The stock is not very expensive, as it trades at 14.5 times FY20 earnings. Hence, we continue to have a buy rating on the stock," added Anand.

A few were pessimistic though.

In a note on Monday, Jefferies India Pvt. Ltd said it keeps its underperform rating on Reliance Industries where valuations are rich and fourth quarter of FY18 was soft, noting that earnings (softer refining, gradual integrated gasification combined cycle ramp-up and softer telecom) and free cash flow (higher capex, a turn in working capital) could also lag Street expectations in fiscal year 2019-2021.