Reliance Shares Jump 8% As Record Q2 Profit, Strong O2C Earnings Lift Sentiment

Reliance Industries shares surged nearly 8% on Monday after the company reported its strongest-ever quarterly financial performance for Q2FY27, with consolidated net profit rising 33.8% year-on-year to a record ₹29,550 crore.

At 12 pm, the stock was trading at ₹1,256.80 on the NSE, after touching ₹1,259 compared with its previous close of ₹1,164.90.

The July-September quarter saw Reliance’s consolidated revenue rise 28% year-on-year to an all-time high of ₹3.62 lakh crore. EBITDA increased 24% to a record ₹62,409 crore, supported by strong performance in its oil-to-chemicals (O2C), digital services and retail businesses.

The results drew positive responses from brokerages Jefferies, Kotak, JPMorgan and Systematix Institutional Research, which highlighted robust refining and petrochemical profitability while flagging concerns around retail margins.

O2C Business Drives Record Earnings

Reliance’s O2C business was a key contributor to the quarter’s performance. Revenue from the segment rose 44.2% year-on-year to ₹2.32 lakh crore, while EBITDA surged 67.9% to ₹25,203 crore.

Transportation fuel cracks, an indicator of refining margins, increased three to 3.7 times from a year earlier and reached historic highs during the quarter. Improved downstream petrochemical margins and favourable feedstock sourcing also supported earnings.

Systematix Institutional Research said Reliance’s consolidated revenue and EBITDA grew 29.8% and 23.4% year-on-year, respectively, to ₹3.3 lakh crore and ₹56,600 crore, with adjusted profit after tax increasing 41% to ₹25,500 crore. The brokerage said EBITDA and PAT exceeded its estimates by 15% and 24%, respectively.

The brokerage raised its FY27 and FY28 EBITDA estimates by 12.7% and 5.7%, citing stronger refining and petrochemical margins. It reiterated its Buy rating, with a revised sum-of-the-parts (SOTP) target price of ₹1,400.

Digital Services Grow, Retail Margins Face Pressure

Reliance’s digital services business continued to deliver growth, while retail profitability remained under pressure due to planned investments in digital commerce, input-cost inflation and a shift in the festive calendar.

Systematix said Jio Platforms’ EBITDA increased 16.6% year-on-year to ₹21,900 crore, while its EBITDA margin expanded 243 basis points to 54.1%. Its subscriber base rose 7.1% to 542.4 million, with average revenue per user (ARPU) improving 3.5% to ₹218.8.

The brokerage noted that Jio’s 5G subscriber base reached 300 million and fixed broadband subscribers crossed 30 million.

Retail revenue grew 5.8% year-on-year to ₹80,200 crore, while EBITDA declined 11.1% to ₹6,100 crore, according to Systematix. Jefferies also said retail EBITDA missed its estimates by 6%, as investments in quick commerce and inflation weighed on margins.

Brokerages Retain Positive Outlook

Jefferies maintained its Buy recommendation on Reliance Industries with a target price of ₹1,710. The brokerage raised its FY27 and FY28 EBITDA estimates by 6% and 2%, respectively, and said it expects strong winter refining profitability.

Kotak also retained its Buy rating, with a target price of ₹1,500. It said strong refining and petrochemical margins supported the O2C outlook amid global supply disruptions.

However, Kotak said retail recovery would depend on festive demand and returns from digital commerce investments. It also highlighted growth opportunities from FMCG brands Campa and Independence, while flagging retail profitability as a concern.

Systematix said Reliance’s net debt declined 4.7% sequentially to ₹1.2 lakh crore, while capital expenditure stood at ₹38,200 crore, directed towards O2C expansion, New Energy projects and consumer business infrastructure.

The brokerage expects earnings contribution from New Energy projects from FY28 and remains constructive on Reliance’s diversified business model and long-term earnings visibility.