Reliance stock outlook rises as O2C lifts Q2 earnings

Reliance Industries delivered a stronger-than-expected September quarter, with improved refining profitability and higher Jio margins lifting the conglomerate's outlook. Business Standard reported on November 2 that the company posted a 27.8 percent rise in gross revenue to INR 3.62 trillion and a 32 percent increase in profit after tax to INR 29,250 crore for Q2 FY27.

The quarter ended September 30 was driven primarily by the Oil-to-Chemicals segment. Higher fuel cracks and downstream spreads supported the best-ever earnings performance, while Jio exceeded expectations on average revenue per user and margins. Upstream performance was broadly stable.

O2C strength offsets retail pressure

Retail remained the main weak spot. Revenue rose only 1 percent year over year, while EBITDA declined 10 percent as a mismatch in festive demand and input-cost inflation weighed on profitability. That divergence leaves Reliance dependent on sustained energy-market strength while its consumer businesses absorb investment and cost pressures.

Brokerage revisions nevertheless turned more constructive. Jefferies raised its FY27 and FY28 EBITDA estimates by 6 percent and 2 percent, respectively, and set a target price of INR 1,710. Dolat Capital lifted its FY27 profit estimate by 6.2 percent but reduced its target to INR 1,635 from INR 1,670. Nomura raised its FY27 EBITDA estimate by 2 percent while cutting its FY28 forecast by 5 percent.

What investors will watch next

The next test is whether strong refining conditions persist through the winter and whether festive demand improves Reliance Retail's earnings trajectory. Risks include commodity and currency swings, competition, delays in monetising new ventures and policy changes.

Indian market conditions remain an important backdrop for Reliance, with the BSE Sensex market context available for investors.

More news and analyses on Reliance stock will be relevant as refining margins and retail demand develop.