Reliance Industries Reports Record Q2 Earnings, Shares Surge 8%

Reliance Industries Ltd (RIL) experienced a significant surge in its stock price, climbing nearly 8% in early trading on Monday. This increase followed the company's announcement of record earnings for the second quarter of FY27, which has garnered positive reactions from various brokerages. The stock not only became the top gainer on the Nifty 50 index but also emerged as the most actively traded stock on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

In the morning session, Reliance shares were trading at ₹1,252, reflecting a 7.5% increase. The conglomerate, led by Mukesh Ambani, now boasts a market capitalization of ₹16.94 lakh crore. The rally in Reliance's stock price contributed to a broader market uptrend, with the Sensex rising by 1,050 points (1.4%) to reach 75,509, while the Nifty gained 290 points (1.3%), trading at 23,343.

The company reported its strongest quarterly financial performance for the July-September period, with consolidated revenue soaring to an all-time high of ₹3.62 lakh crore, marking a 28% year-on-year increase. EBITDA also reached a record ₹62,409 crore, up 24%, while net profit surged 34% to ₹29,550 crore, setting a new quarterly record. The oil-to-chemicals (O2C) segment was a major driver, with revenue rising 44.2% to ₹2.32 lakh crore and EBITDA increasing 67.9% to ₹25,203 crore.

Reliance's digital services sector also showed robust growth, with Jio Platforms reporting an 11.3% year-on-year revenue increase to ₹47,485 crore. EBITDA for this segment rose 16.6% to ₹21,879 crore, supported by an increase in subscribers and higher average revenue per user. Despite the strong performance in O2C and digital services, retail operations faced challenges due to shifting festive demand.

Following these impressive results, both Goldman Sachs and Nomura reaffirmed their 'Buy' ratings on Reliance Industries. Goldman Sachs set a target price of ₹1,840 per share, indicating a potential upside of 58% from the previous closing price. Nomura also maintained a positive outlook with a target price of ₹1,560 per share, highlighting the impact of high refining margins on the company's earnings. However, both brokerages noted the potential for moderating refining margins in the upcoming quarter due to increased freight costs.