Reliance Industries shares in focus after Q1 profit beats estimates. Should you buy, sell or hold?
ADVERTISEMENT The surge in profit was largely driven by a one-time gain of Rs 8,924 crore from the sale of its stake in Asian Paints, boosting other income. The profit beat Street estimates of Rs 22,069 crore.
Revenue from operations rose 5.3% to Rs 2,48,660 crore, up from Rs 2,36,217 crore a year ago. Ebitda for the quarter stood at Rs 58,024 crore, up 36% from Rs 42,748 crore in Q1FY25. Ebitda margin improved 460 basis points to 21.2%.
Reliance Retail Ventures posted an 11.3% year-on-year increase in revenue, with strong performance across segments, particularly in grocery and fashion.The Oil-to-Chemicals (O2C) segment saw a 1.5% YoY revenue decline due to weaker crude prices and lower volumes amid a planned shutdown. However, domestic placement of transportation fuels via Jio-BP provided some support.
ADVERTISEMENT Oil & Gas revenue also dipped 1.2% YoY, hurt by lower KGD6 gas sales, lower CBM gas prices, and weaker crude realisation. Improved KGD6 gas price partially offset the decline.Jio Platforms reported a 23.9% YoY increase in Ebitda, driven by growth in ARPU and a 210 bps margin expansion on the back of operational efficiency.
ADVERTISEMENT Commenting on the results, Chairman & Managing Director Mukesh Ambani said that RIL has started FY26 with a robust, all-around operational and financial performance. Consolidated EBITDA for 1QFY26 improved strongly from the year-ago period despite significant volatility in global macros, he said."During the quarter, energy markets encountered heightened uncertainty, with sharp fluctuations in crude prices. Our O2C business delivered strong growth, with a thrust on domestic demand fulfilment and offering value-added solutions through the Jio-bp network. Performance was supported by improvement in fuel and downstream product margins. Natural decline in KGD6 gas production resulted in marginally lower Ebitda for the Oil & Gas segment," Ambani said.
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Maintains "Outperform" with a target price of Rs 1,500. It noted Jio's robust performance, but flagged lagging retail growth and a gradually recovering O2C segment. The Q1 earnings beat was driven by one-off investment gains. Macquarie expects near-term moderation in the stock price post-results.
ADVERTISEMENT Maintains "Overweight" with a target of Rs 1,617. It flagged misses in retail and refining revenue but highlighted optimistic guidance, including a plan to double earnings by 2029. Morgan Stanley sees strength in new energy, telecom, and the balance sheet, while still assessing the impact of new European sanctions on Russian oil.Reiterates "Buy" with a revised target of Rs 1,700 (up from Rs 1,685). It cut FY26–27E EBITDA by 1–2% and PAT by 4% due to weak retail and O2C performance. However, it remains positive on growth, especially in Jio, and projects an 11% CAGR in EBITDA/PAT through FY28.
Also read: Is RIL's strong profit growth sustainable amid rising capital expenditure?
Maintains "Buy" with a target of Rs 1,767. It sees Reliance's New Energy business as a long-term growth engine, with a 10GW polysilicon-to-module facility expected by end-FY26. Nuvama also noted benefits from next-gen tech, petrochem expansion, and a 50% rise in US ethane imports.
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