Reliance Industries (RIL) may have posted a one-off gain-fuelled jump in profits this quarter, but brokerages are looking past the headline numbers. They are betting on what lies ahead for the oil-to-chemicals conglomerate, a playbook of expanding telecom margins, a retail rebound, refining tailwinds, and an evolving new energy business. The verdict? A resounding "buy" call across the board.
Despite the strong support from the analyst community, investors rushed to book profits off RIL’s stock, pulling it down close to 2% in opening trade on July 21.
For the April-June quarter, Reliance clocked a 77% rise in net profit to ₹30,783 crore, its highest ever, aided by an ₹8,924 crore exceptional gain from divesting its stake in Asian Paints. Stripping out this one-time boost, profit still rose a healthy 25% year-on-year, displaying the strength of RIL’s core operations. Consolidated revenue climbed 6% to ₹2.73 lakh crore, while Ebitda rose 36% to ₹58,024 crore.
However, it is the conglomerate’s future growth potential that seems more enticing for brokerages. Motilal Oswal sees Reliance’s telecom arm, Jio, as the key engine in the coming years, forecasting a 19% Ebitda CAGR over FY25–28. Tariff hikes, deepening market share, and consistent subscriber additions, which came at 9.9 million this quarter alone, are seen as major tailwinds. Likewise, the brokerage maintained a ‘buy’ call on RIL with a target price of ₹1,700.
Reliance Retail, which saw revenue rise 11.3% to ₹84,171 crore and Ebitda inch up by 12.7%, is also expected to pick up pace. Motilal anticipates a 14–15% CAGR in both revenue and Ebitda, as consumer demand recovers and store expansion resumes. Its FMCG arm, only in its second year, clocked sales of ₹11,450 crore, adding yet another layer to the conglomerate’s consumer-facing thrust.
The oil-to-chemicals (O2C) business told a mixed tale. Revenue dipped slightly, down 1.5% to ₹1.55 lakh crore, mostly impacted by lower crude prices and planned refinery maintenance. However, Ebitda rose 11% to ₹14,511 crore, thanks to better domestic fuel margins and transportation fuel cracks. Jefferies, while it retained its ‘buy’ rating on the stock with a target of ₹1,726, believes the refining outlook remains constructive.
For Morgan Stanley, the long-term narrative is compelling. Despite short-term misses in retail revenue and refining output, the brokerage noted the management’s bold guidance, revealed by Chairman Mukesh Ambani. The goal is to double earnings by 2029, a marker of the management’s confidence over long-term prospects. Consequently, Morgan Stanley held on its ‘overweight’ rating, which comes with a target of ₹1,617.
Nomura, too, stayed bullish, with a ₹1,600 target. It expects investor focus to shift towards the company’s upcoming annual general meeting to gauge future plans, with particular interest in a possible Jio listing and energy business updates.
