Reliance shares jump over 6%: Why RIL stock is rallying today
Shares of Reliance Industries surged over 6% on Monday, emerging as the top gainer on the Nifty 50, after the company reported record earnings for the September quarter. Strong performance in its oil-to-chemicals (O2C) business, growth in digital services and bullish views from brokerages have lifted investor sentiment.
The stock was trading at Rs 1,237.50, up Rs 73.95 or 6.36%, in the latest available market data. It had touched an intraday high of Rs 1,246.45, compared with its previous close of Rs 1,163.55.
Reliance also emerged as one of the biggest positive contributors to the benchmark indices, with its market capitalisation standing at around Rs 16.77 lakh crore in early trade.RECORD Q2 EARNINGS DRIVE THE RALLY
Reliance Industries reported its strongest-ever quarterly financial performance for the July-September quarter (Q2 FY27), with consolidated revenue rising 28% year-on-year to an all-time high of Rs 3.62 lakh crore.
EBITDA increased 24% to a record Rs 62,409 crore, while net profit jumped 34% to Rs 29,550 crore. The strong performance was driven by growth in its O2C business, digital services and retail operations.
The O2C business was a major contributor to the improvement. Its revenue rose 44.2% year-on-year to Rs 2.32 lakh crore, while EBITDA surged 67.9% to Rs 25,203 crore. Transportation fuel cracks, an indicator of refining margins, rose three to 3.7 times from a year earlier and reached historic highs during the quarter.
This strong refining performance helped Reliance deliver a record quarter, giving investors a key reason to turn positive on the stock.JIO'S GROWTH ADDS TO INVESTOR CONFIDENCE
Reliance's digital services business also reported healthy growth. Jio Platforms recorded an 11.3% year-on-year increase in revenue to Rs 47,485 crore, while its EBITDA rose 16.6% to Rs 21,879 crore.
The growth was supported by subscriber additions, higher average revenue per user (ARPU) and expansion in digital services.
Jio's performance is particularly important for Reliance as investors assess the growth potential of its telecom and digital businesses alongside its traditional energy operations.BROKERAGES REMAIN BULLISH ON RELIANCE
The strong quarterly numbers have also prompted brokerages to maintain their positive view on the stock.
Goldman Sachs and Nomura retained their Buy ratings on Reliance Industries, citing strong refining earnings and steady growth in telecom.
Goldman Sachs set a target price of Rs 1,840 per share, implying an upside of around 58% from Friday's closing price of Rs 1,164.90. The brokerage said Reliance's Q2 EBITDA was 9% above its estimates, largely driven by the strong O2C performance.
Nomura also maintained its Buy rating, with a target price of Rs 1,560. It attributed the record earnings to multi-decade-high refining cracks and noted that consolidated EBITDA rose 19% sequentially, beating its estimates by 9%.
However, brokerages also flagged some concerns. Goldman Sachs expects refining margins to moderate in the December quarter due to higher very large crude carrier freight costs, although processing discounted heavy crude could partly offset the pressure. Reliance Retail also remained relatively weak amid a shift in festive demand and investments in digital commerce.
For now, the record earnings and positive brokerage outlook appear to be driving the sharp rally in Reliance shares.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
