Reliance Industries Stock Posts 3% Gain Following Q4 Earnings Release, Brokerages Maintain Bullish Outlook Amid O2C Segment Challenges

Reliance Industries Shares Rise 3.2% on Quarterly Earnings

Reliance Industries Ltd shares rose over 3 percent on Monday, outperforming the benchmark indices, after the company reported its March quarter earnings. The stock closed at Rs 1,370 on the National Stock Exchange (NSE), up 3.2 percent, compared with a 0.8 percent gain in the Nifty 50.

Reliance reported an 8.9 percent year-on-year decline in net profit to Rs 20,589 crore for the January-March quarter, even as revenue rose 12.9 percent to Rs 3,25,290 crore. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) remained largely flat at Rs 48,588 crore, with strength in digital services and retail offsetting weaker energy earnings.

Chairman Mukesh Ambani highlighted progress in the company's new energy investments, calling them a future growth engine. The diversified portfolio of Reliance Industries helped it navigate the volatility caused by geopolitical disruptions, volatile energy prices, and shifting global trade patterns.

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Brokerage firms have maintained bullish ratings on the company, despite weakness in its core energy business. CLSA has an 'outperform' rating on the stock with a target price of Rs 1,800. The brokerage said Reliance's profit beat estimates by 2 percent, but noted that both O2C and retail segments underperformed. It attributed margin pressure to the US-Iran conflict, which disrupted supply chains and raised costs.

Nomura has a 'buy' rating on Reliance Industries shares with a target price of Rs 1,680. It termed the quarter weak, with misses in the O2C and exploration and production (E&P) segments. However, the proposed Jio IPO remains a key catalyst for the stock.

Morgan Stanley has an 'overweight' rating with a target price of Rs 1,803. The brokerage highlighted weakness in O2C margins and upstream performance, but expects a recovery led by energy, chemicals, and retail businesses. It also pointed out the positive momentum in the retail and FMCG segments.

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Reliance Industries said its consumer-facing businesses - telecom and retail - helped cushion the impact of sharp disruption in global energy markets during the quarter, driven by the Middle East conflict and energy price volatility. However, higher finance costs and depreciation, following the operationalisation of 5G spectrum assets, weighed on profitability during the quarter.