Reliance Industries Surge: How Q2 Earnings Spark Brokerage Optimism

Analysts highlighted that growth has returned across all key business segments after a challenging year.

Morgan Stanley noted that RIL's robust 22 per cent year-on-year (YoY) growth in fashion revenue, along with China's anti-involution policies impacting chemicals, solar, and refining, and increasing AI adoption, could drive future earnings upgrades.

The brokerage added that the positive momentum in consumer retail and fuel refining sets up a strong December 2025 quarter, while new energy and AI initiatives are expected to contribute to the next USD 50 billion in value creation.

It stated "RIL's earnings should get investor confidence back; re-rating is ahead as consumer retail is turning around and beat estimates".

JM Financial stated that RIL's consolidated Q2FY26 EBITDA at Rs 459 billion, 3.2 per cent above its estimates and 1.8 per cent above consensus, up 6.9 per cent quarter-on-quarter (QoQ) and 17.5 per cent YoY. Retail EBITDA rose 16.3 per cent YoY to Rs 68.2 billion, led by 22-23 per cent YoY growth in Grocery and Fashion & Lifestyle.

It also highlighted that the digital business EBITDA was Rs 188.8 billion, 0.6 per cent above estimates, supported by 8.3 million new subscriber additions and higher ARPU at Rs 211.4.

Other segments such as O2C and E&P largely met expectations.

JM Financial gave a BUY rating with a target of Rs 1,700, citing RIL's industry-leading capabilities and a projected 15-20 per cent EPS CAGR over the next 3-5 years.

It stated "RIL's industry leading capabilities across businesses is likely to drive robust 15-20 per cent EPS CAGR over the next 3-5 years".

Another brokerage, Macquarie Research highlighted retail growth of 19 per cent YoY, driven by broad-based performance across verticals and stable margins despite more than doubling of customer growth in JioMart.

Hyper-local commerce scaled up 3x YoY in daily orders, while Jio added 8 million net subscribers in Q2 to a total of 506 million.

The brokerage also noted progress in RIL's AI ecosystem and new energy projects, including Solar PV and Battery Energy Storage giga-factories, on track.

Following these results, Macquarie revised its 12-month target price for RIL to Rs 1,650 from the October 16, 2025, price of Rs 1,398, projecting an 18.4 per cent total shareholder return.

With growth returning across segments and strategic initiatives gaining traction, analysts expect RIL to continue driving earnings upgrades and value creation.

- ANI