Reliance Industries Shares Rally Following Strong Q2FY27 Results and Brokerage Upgrades

Reliance Industries shares rallied 11.6 per cent on Monday following the company’s Q2FY27 financial results. The stock closed at ₹1,300 on the NSE, up from its previous close of ₹1,164.90, leading the gainers in the Nifty 50 session. This marks the largest single-day gain for the stock since April 2020.

The strong market response followed a 33.8 per cent year-on-year rise in consolidated net profit, which reached a record ₹29,550 crore for the quarter. The company's quarterly performance drew positive reviews from major brokerages including Jefferies, Kotak, and JPMorgan, all of which maintained positive recommendations while highlighting the strong output of the refining and petrochemical businesses.

According to data highlighted by Jefferies, Reliance Industries’ consolidated EBITDA rose 23 per cent year-on-year to ₹566 billion in Q2, beating estimates by 6 per cent. The oil-to-chemicals (O2C) business primarily led this performance, with O2C EBITDA jumping 48 per cent quarter-on-quarter to ₹252 billion. JPMorgan similarly noted that profit after tax grew 41 per cent to ₹255.5 billion.

However, the company's retail segment faced headwinds during the quarter. Retail EBITDA missed estimates by 6 per cent and declined 10 per cent year-on-year, as investments in quick commerce and inflationary pressures weighed on margins. Kotak noted that retail recovery will largely depend on festive demand and returns from digital commerce investments, while also highlighting ongoing growth opportunities from FMCG brands Campa and Independence.

Major brokerages adjusted their targets and estimates following the results. Jefferies maintained a buy recommendation with a target price of ₹1,710, raising its FY27 and FY28 EBITDA estimates by 6 per cent and 2 per cent respectively, and pointing to strong expected winter refining profitability. Kotak maintained a buy rating with a ₹1,500 target price, noting that global supply disruptions support ongoing refining and petrochemical margins. JPMorgan maintained an overweight rating, raising its target price to ₹1,675 from ₹1,625 and increasing its FY27 and FY28 earnings per share estimates by 10.9 per cent and 5 per cent respectively.

Meanwhile, analysts at Motilal Oswal Financial noted that RIL is currently trading at a 54 per cent holding company discount on its 64.5 per cent stake in JPL, which they view as excessive. The domestic brokerage stated that while the energy segment drives near-term earnings upgrades, recovery in Reliance Retail Ventures Limited's growth and profitability will remain a key driver of the stock price moving forward.

"Reliance Industries' latest Q2 performance underscores the robust resilience of its core oil-to-chemicals segment, which successfully offset near-term margin pressures in the retail division caused by quick commerce investments and inflation. For large enterprises and growing businesses alike, this highlights the importance of maintaining a diversified operational model where strong core segments can sustain overall profitability during transitional investment phases in emerging sectors like digital commerce and retail." — Dr. Shishir Gupta, Founder & CEO, StartupLanes