Reliance Industries (RIL) delivered a robust 78% year-on-year (YoY) jump in its Q1FY26 net profit to ₹26,994 crore, aided significantly by a one-time gain from the stake sale in its arm, Asian Paints. Strong earnings growth in Jio Platforms and Retail further boosted overall profitability, although the Oil & Gas (O&G) segment saw a slight decline and the Oil-to-Chemicals (O2C) business reported only modest gains.
Despite these mixed results across verticals, brokerages largely maintain a “Buy” stance on the stock, expressing confidence in the long-term growth potential of new energy initiatives, Jio, and the Retail business.
Motilal Oswal: Positive Outlook with Revised Target
Motilal Oswal reiterated a “Buy” rating with a revised target price of ₹1,700 (up from ₹1,685). The brokerage noted that consolidated EBITDA declined 2% QoQ but grew 11% YoY, which was about 5% below estimates. Retail and O2C performance remained weak, leading the firm to reduce its FY26–FY27 EBITDA estimates by 1–2% and profit after tax (PAT) by 4%.
However, Motilal expects Reliance Jio (RJio) to be the key growth driver, forecasting a 19% EBITDA CAGR between FY25 and FY28. While Q1 was soft, the brokerage remains optimistic about growth across segments and expects an ~11% CAGR in EBITDA and PAT over FY25–FY28.
Nuvama: New Energy Seen as Long-Term Catalyst
Nuvama also maintained its “Buy” rating with a target price of ₹1,767. It emphasized the potential of the New Energy ecosystem, which it expects to ramp up in the next 4–6 quarters. This segment is seen as a major long-term growth engine.
Nuvama highlighted that RIL’s fully integrated 10GW polysilicon-to-module facility, expected by end-FY26, could add up to 6% to consolidated PAT. RIL’s push into next-gen technologies like perovskite and ongoing petrochemical expansion (Petchem) projects remain on track for FY27E. Additionally, a 50% rise in U.S. ethane imports is likely to improve margins.
HSBC: Operational Softness but Long-Term Story Intact
HSBC gave a “Buy” call with a target price of ₹1,630. While the earnings were supported by the one-time share sale, operational metrics were softer due to weakness in O2C and Retail.
However, HSBC sees positive traction in RJio’s fixed wireless broadband offering (Air Fibre) and believes Retail is on the verge of a turnaround. The brokerage is also optimistic about RIL’s readiness to scale up in the new energy segment.
Nomura: Three Key Growth Triggers
Nomura maintained its “Buy” rating with a target of ₹1,600, citing soft results from O2C and Retail segments. However, it sees three major triggers for future growth: the scale-up of the New Energy business, potential tariff hikes for Jio that could directly boost profitability, and a possible IPO or listing of Jio, although the timeline has been pushed beyond 2025.
Jefferies: Strong Jio, Sluggish Retail and O2C
Jefferies has a “Buy” rating on RIL with a target price of ₹1,726. It reported that consolidated EBITDA was 3% below its estimate, with O2C and Retail EBITDA falling short by 5% and 4% respectively.
Retail grew 8% YoY, but electronics sales lagged due to early monsoon and slower expansion. Jio saw growth driven by subscriber additions, broadband penetration, and better margins. O2C operations were impacted by a temporary refinery shutdown.
Morgan Stanley: Cautious Optimism Despite Misses
Morgan Stanley (MS) maintained an “Overweight” stance with a target price of ₹1,617. It noted that RIL’s Q1 earnings did not instill the growth confidence it had hoped for, citing misses in Retail revenue and fuel refining margins. However, the company’s forward-looking guidance remains positive, with an ambitious goal to double earnings by 2029. MS sees telecom, new energy, and balance sheet strength as bright spots.
Macquarie: Valuation Concerns Remain
Macquarie remained more cautious with an “Underperform” rating and a lower target price of ₹1,500. The firm observed that the earnings optically beat expectations primarily due to one-off gains from investment sales. Segment-wise, Jio remained solid, Retail was underwhelming, and O2C continued its gradual recovery. Macquarie acknowledged that management commentary highlighted strong optionality in the New Energy, Jio, and Retail verticals.
Despite a mixed bag in operating performance, brokerages remain largely bullish on Reliance Industries, primarily due to its diversified business model and growth visibility in emerging segments like new energy and telecom. The market awaits further clarity on the execution timeline and financial outcomes from these future-focused ventures, but the strategic direction of the company continues to inspire long-term confidence.
Disclaimer:
The information provided in this article is for informational and educational purposes only. It does not constitute investment advice or a recommendation to buy or sell any securities. Please consult your financial advisor before making any investment decisions. The views and target prices mentioned are based on brokerages and analysts' reports and may change depending on market conditions
