Buy Reliance Industries Ltd For the Target Rs.1,679 by Geojit Financial Services Ltd
Diversified growth driving sustainable returns
Reliance Industries Ltd (RIL) manufactures petrochemicals, synthetic fibres, fibre intermediates, textiles, blended yarns and polyester staple fibres. Its petroleum refinery-cum-petrochemicals complex in Jamnagar, Gujarat, produces gasoline, superior kerosene oil and liquefied petroleum gas, among other products.
* RIL’s revenue rose 9.9% YoY to Rs. 258,898cr in Q2FY26, driven by robust doubledigit growth across its key business segments.
* Revenue from the digital services division rose 14.6% YoY to Rs. 43,617cr and revenue from the retail business jumped 18.6% YoY to Rs. 90,544cr.
* EBITDA climbed 13.9% YoY to Rs. 50,313cr in Q2FY26, led by strong topline growth, offsetting the increase in employee benefit expense (+12.7% YoY), purchases of stock in trade (+23.6% YoY) and other expense (+15.1% YoY).
* EBITDA margin expanded 60bps to 19.4% in Q2FY26 from 18.8% in Q2FY25.
* Reported Profit after tax (PAT) grew 14.3% YoY to Rs. 22,092cr on the back of revenue growth, despite a 13.5% YoY increase in finance costs due to operationalisation of 5G spectrum assets and higher liability balances.
* Capex for Q2FY26 stood at Rs. 40,010cr. The allocation was primarily towards expanding the oil-to-chemicals (O2C) capacity, enhancing Jio’s telecom network and digital services, growing the retail presence and establishing gigafactories.
Outlook & Valuation
RIL demonstrated robust growth supported by strong execution across O2C, retail and digital services in Q2FY26. Retail continues to benefit from festive demand, premiumisation and omnichannel penetration. Jio’s technology edge ensures continued leadership in connectivity and digital ecosystems. The company’s ongoing expansion in consumer business, rapid scale-up of JioAirFiber, focus on indigenous artificial intelligence (AI) capability and new energy initiatives strengthen its longterm growth visibility. With investments aligned toward emerging opportunities in energy transition and advanced technology, RIL is well-positioned to deliver sustainable value creation. Hence, we upgrade our rating on the stock to BUY from HOLD based on SOTP valuation with a revised target price of Rs. 1,679.
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SEBI Registration Number: INH200000345
