Shares of Reliance Industries Ltd (RIL) dropped over 2.5% in Monday’s trading session, as investors appeared unimpressed by the conglomerate’s highest-ever quarterly profit and EBITDA performance, amid underwhelming results in its key retail and oil-to-chemicals (O2C) segments.
The stock opened at ₹1,465 per share, below the previous close of ₹1,476, and declined further to ₹1,439 by noon, down 2.5%.
This came despite the Mukesh Ambani-led firm posting a 76% year-on-year jump in consolidated net profit for the April-June quarter of FY26.
Strong top-line and profitability gains in Q1
Reliance reported consolidated profit after tax (PAT) of ₹30,681 crore for the first quarter of FY26, significantly ahead of analysts’ estimates and up from ₹17,448 crore in the same quarter a year ago.
Consolidated EBITDA rose 35.7% to ₹58,024 crore, marking the group’s best quarterly performance to date.
Revenue grew 6% year-on-year to ₹2,73,252 crore.
Chairman Mukesh Ambani said, “Reliance has begun FY26 with a robust, all-round operational and financial performance. Consolidated EBITDA improved strongly from the year-ago period, despite significant volatility in global macros.”
The EBITDA margin improved by 460 basis points to 21.2% from 16.6% last year, reflecting improved cost efficiencies and growth in high-margin segments.
Retail and oil-to-chemicals fail to meet analyst expectations
Despite the strong headline numbers, earnings in the O2C and retail segments came in lower than expected, tempering the market’s response.
The company cited planned maintenance shutdowns at its Jamnagar refinery and seasonal weakness in consumer electronics as key factors affecting performance.
Nomura flagged a weaker-than-anticipated show in retail and O2C, attributing it to maintenance activities and elevated feedstock and freight costs.
CLSA noted that a 3% miss in O2C EBITDA and a 5% miss in retail EBITDA overshadowed strong showings from the upstream and telecom unit Jio.
Brokerages raise price targets despite market reaction
While the market reacted negatively in the short term, the results prompted at least 10 analysts to raise their target prices on the stock.
Analysts believe the moderation in stock prices may be short-lived.
A rebound in gross refining margins, coupled with Jio’s expansion and recovery in discretionary retail, could drive stronger performance in upcoming quarters.
The median target price has climbed to ₹1,640 from ₹1,565 a month ago.
“Retail and Jio are likely to accelerate, and the new energy ecosystem is expected to fully operationalise in four to six quarters, with partnerships and a self-funded model in a few years,” Emkay analysts said in a note.
Domestic brokerage Motilal Oswal Financial Services cut FY26–27 earnings estimates by 1–4%, but raised its price target slightly to ₹1,700 per share.
“While 1Q was soft, we remain sanguine on RIL’s growth prospects across segments and build in a CAGR of ~11% in EBITDA/PAT over FY25-28E,” the brokerage said.
Jefferies maintained a “buy” rating with a revised target of ₹1,726, acknowledging short-term weakness but expressing optimism about the O2C outlook.
Reliance shares are still up about 19% year-to-date, outperforming the broader Nifty 50 index, which has gained 5.9% in the same period.
As the company navigates operational hurdles and global headwinds, the street appears to be betting on a longer-term story built around telecom, retail expansion, and clean energy transformation.
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