Reliance Industry Ltd. (RIL) stock rose 6.36% on Monday early trading session after posting record Q2 FY27 numbers. Driven by strong refining margins from the Oil to Chemicals (O2C) segment and steady growth from its Jio Platforms, investors have been optimistic. Global broking firm Goldman Sachs has retained its Buy recommendation on the stock, with a target price of Rs 1840, which shows upside potential of around 58%.
Reliance has been one of the most significant contributors to gains in the benchmark, with a market cap of around Rs 16.77 lakh crore.
Let us look at what has driven Reliance Industries’ performance, including growth from its various segments, brokerage recommendations and potential risks.
Reliance Industries Share Price Soars 6.36%
Reliance Industries shares saw strong buying after announcing its September quarter results for FY27.
Shares rose 6.36% to hit an all-time high of Rs 1237.50. This is its best single day gain in nine months.
This suggests that investors are confident about Reliance’s earnings growth going forward, particularly as refining and digital segments performed well.
The company has a market cap of around Rs 16.77 lakh crore and contributed heavily to market gains.
Reliance Industries Q2 FY27 Results – Revenue and Profits Rise Sharply
Reliance Industries posted solid results for Q2 FY27.
Revenues were up 28% year-on-year to Rs 3.62 lakh crore, while EBITDA increased 24% to Rs 62,409 crore.
Net profits rose even more sharply, up 34% to Rs 29,550 crore.
Below are the key figures from Reliance Industries Q2 FY27.
Q2 FY27 YoY Growth
- Revenue – ₹3.62 lakh crore 28%
- EBITDA – ₹62,409 crore 24%
- Net Profit – ₹29,550 crore 34%
The strong results were driven by strong growth in Reliance’s O2C segment, Jio Platforms and other segments.
The increase in profitability suggests that Reliance’s diversified portfolio is helping it grow. However, whether this growth can be sustained in the coming quarters will depend on the operating environment.
O2C Segment Drives Growth
Reliance’s Oil to Chemicals (O2C) segment drove growth in the September quarter.
Revenues grew 44.2% year-on-year to Rs 2.32 lakh crore, with EBITDA rising 67.9% to Rs 25,203 crore.
This was driven by strong refining margins.
Cracking in transport fuels increased by three to 3.7x versus last year, which helped boost refining.
Cracking in transport fuels helps refining as crude oil costs are less than the sale price of the refined products.
This helped Reliance see stronger earnings.
However, investors should note that refining can be a cyclical business and depends on crude oil prices, global demand, cracking and transport costs.
Jio Platforms Q2 FY27 Results – Revenue Up 11.3%
Jio Platforms continue to show steady growth, highlighting its role as an important segment for Reliance Industries going forward.
During Q2 FY27 Jio Platforms saw revenues rise by 11.3% to Rs 47,485 crore.
EBITDA increased 16.6% to Rs 21,879 crore.
This was driven by:
- New subscribers.
- Improving ARPU.
- Growth in digital services.
Jio saw strong growth in EBITDA relative to revenue, suggesting an improvement in its operating leverage.
Longer term, Jio will help Reliance Industries gain exposure to India’s growing digital economy.
Reliance Industries Share Price Target – What Do Brokers Say?
The strong results have prompted brokers to remain positive on Reliance Industries.
Around 12 brokers have given positive ratings, including Goldman Sachs, Citi, Jefferies and Nomura.
Goldman Sachs Sees 58% Upside Potential
Goldman Sachs has reiterated its Buy recommendation on Reliance Industries with a target price of Rs 1840.
This suggests there is upside potential of around 48.6% based on the current stock price of Rs 1237.50.
(Note: Targets are indicative. Investors should check the reference price and the date of the report.)
Key Risks to Watch
Despite the strong results and positive broker sentiment there are still some key risks to watch.
Refining Margins Could Drop
Goldman Sachs expects refining margins to fall in Q3 FY27.
Given how high refining margins were in the September quarter it may be hard to replicate the strong performance.
VLCC Costs Rising
Transport costs are rising with VLCC costs, which may hurt refining margins.
However, processing discounted heavy crude may help offset this.
Reliance Retail
Reliance Retail is a concern as it has not performed well.
Festive demand could change, consumer spending may be impacted and investments in digital could impact near-term profitability.
However, if Reliance Retail can turn around then it will help give a boost to Reliance’s earnings growth.
Is Reliance Industries a Good Stock to Watch?
Reliance Industries has shown the strength of its diversified business model.
Its O2C segment has been its biggest contributor to earnings in recent months, with very favourable refining margins. On the other hand its Jio Platforms has provided a fairly steady source of growth with subscriber growth, rising ARPU and digital services.
However, investors should not just look at the latest results and sharp rise in the stock price.
Whether refining margins can be sustained, whether Reliance Retail turns around and whether Reliance can continue to show strong consolidated earnings growth will be important.
Longer term, Jio’s digital platform and Reliance’s diversified model provide growth opportunities. However, in the short-term, refining margins may return to normal levels, which should be closely watched.
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