Brokerage firm Nomura downgraded Reliance Industries to 'neutral' from 'buy' citing rich valuations after the recent run-up. The downgrade comes days ahead of the quarterly earnings announcement by the oil-to-telecom conglomerate. Nomura, however, raised its target price on the RIL stock, suggesting a six percent upside.Reliance Industries shares snapped a five-day winning streak to move lower on Wednesday. The company is due to post its financial results for the quarter ended September 30 on Friday.In a note dated October 18, the brokerage said the outlook for Reliance Industries' key businesses has improved, lifting its target price on the stock to Rs 2,850 from Rs 2,400.A limited upside is seen in the stock in the near term, said the research note by Nomura analysts Anil Sharma and Aditya Bansal."We cut FY22F/FY23F EBITDA by 10 percent/6 percent due to weak H1 FY21 and delays in telecom tariff hikes. Our FY22F/FY23-24F earnings are 8 percent/ 16 percent higher than consensus, and we see low scope for an earnings surprise. In our view, after the recent strong run, valuations at 20.5x FY23F P/E and 12x FY23F EV/EBITDA are rich," it said.Here's what the brokerage said on Reliance Industries:H1 weak, outlook improved for key segmentsAfter a relatively weak first half of FY22, mainly due to the second wave of COVID, the outlook for each of the company's key segments has been improving, Nomura said. In RIL's oil-to-chemicals segment, refining margins have risen sharply.In the exploration & production business, gas rates have seen a significant increase. In the telecom unit, the government's recent relief measures have been positive, and net additions of subscribers have picked up the pace, according to Nomura. The brokerage also said that although delayed, but a tariff hike is inevitable. It said the footfall in the retail business is normalising.New energy is the new focusReliance Industries shares' recent rise of 28 percent in the past three months against Nifty50's 12 percent was in part driven by its big foray into "new energy".Last month, the company announced it had already started working on a green energy complex in Jamnagar with an investment of Rs 75,000 crore. The company plans to set up four Giga factories.Nomura said it values RIL's new energy at one times its planned investments or Rs 118 per share. Unlike Reliance Industries' forays into telecom and retail businesses over a decade ago, wherein investors were apprehensive of its diversification into non-energy, its investments into clean or green energy have been positive for the ESG theme, according to the brokerage.Reliance Industries shares ended 1.2 percent lower at Rs 2,699.9 apiece on BSE. The RIL stock has broken a series of records in the recent past, helping the conglomerate cement its position as the country's most valuable company.Stock/indexReturn (%)Three monthsSix monthsReliance Industries28.942Sensex17.428.7This month, Reliance Industries' market capitalisation touched the Rs 18 lakh crore mark for the first time ever.Here's how RIL shares have fared in the past one year:2021 likely to be the seventh straight year of outperformance for RIL sharesNomura said 2021 is likely to be the seventh straight year of outperformance compared with the broader market for Reliance Industries shares. The stock has seen a very strong run in the past several years despite the company's large size. In each of the past six calendar years, it has outperformed the benchmark Nifty index.However, in the first half of 2021, the stock was relatively muted, and underperformed the broader market, according to Nomura. The recent run in RIL shares has been driven by both the improving outlook for each of its key operating businesses, and investors reading its planned foray into new energy business positively, it said.Nomura has Bharat Petroleum (target price: Rs 550 and IGL (target price: Rs 650) as its preferred picks in the largecap segment.Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.