Shares of Reliance Industries (RIL) dropped nearly 3% in early trade on Monday even after billionaire Mukesh Ambani-owned oil-to-telecom conglomerate reported robust earnings in the June quarter of the current fiscal. The sell-off in RIL shares was attributed to a moderate quarter-on-quarter (QoQ) performance, as net profit and Earnings before Interest, Taxes, Depreciation, and Amortisation (EBITDA) declined on sequential basis. Adding to this, the muted performance of the Oil-to-Chemicals (O2C) business, along with profit booking at higher levels, also weighed on the country’s most valued stock.

RIL shares declined as much as 2.7% to ₹1,436.85 on the BSE, after starting the day on a flat note. Early today, Reliance shares opened marginally lower at ₹1,474.95, against the previous closing price of ₹1,476.85.

At the time of reporting, Reliance shares were trading 2.1% lower at ₹1,445.70, with a market capitalisation of ₹19.57 lakh crore. The bluechip stock is down 9% from its 52-week high of ₹1,589.50 touched on July 19, 2024, while it has risen nearly 30% from its 52-week low of ₹1,115.55 hit on April 7, 2025.

RIL shares have fallen nearly 4% in the past one year, while it has risen over 13% in six months. The counter has fallen marginally by 1% in the last one month.

For the first quarter ended June 30, 2025, RIL reported  the highest-ever consolidated net profit of ₹30,783 crore, a significant rise of 76.5% year-on-year (YoY), driven by gains from an Asian Paints stake sale and robust growth across RIL's consumer-facing businesses. The oil-to-telecom giant's gross revenue saw a decent 6% YoY rise to ₹2.73 lakh crore.

On the operational front, Reliance Industries’ EBITDA rose nearly 11% to ₹42,905 crore, and its operating profit margin expanded by 80 basis points to 17.25% as against 16.41% seen in the same period last year.

Excluding a one-time gain worth ₹8,924 crore from the sale of its stake in Asian Paints, RIL's net profit grew 25% YoY, while EBITDA rose 15%.

Consolidated capital expenditure moderated quarter-on-quarter (QoQ) to ₹29,900 crore in Q1FY26, down from ₹36,000 crore in Q4FY25. Net debt rose slightly by ₹500 crore QoQ to ₹1.17 lakh crore.

Analysts remain bullish on healthy guidance

Most brokerages remained positive on RIL shares following the June quarter results, citing the management’s healthy outlook on capital expenditure plans for the new energy business.

“RIL has provided greater clarity on new energy capex plans and guidelines, with its intent to demerge consumer products division from retail being a key development. OTC remains volatile, with uncertain margin trends but overall prospects look stronger,” said ICICI Securities in a report. It has reiterated ‘ADD’ rating with a target price of ₹1,570 per share.

The management of RIL highlighted its plans to go from sand to solar modules and establish world scale battery storage solutions to provide round the clock renewable energy (RTC-RE) for its own use and external sales. The group is looking to set up and demonstrate the de-risking of the business model over the next 18 months, before attracting third-party partnerships/investments to make this a self-funded perpetual growth driver for the company, the brokerage said in its report.

JM Financial has also reiterated ‘BUY’ rating with a target price of ₹1,700 per share, expecting net debt to decline gradually, and also because RIL has industry leading capabilities across businesses to drive robust 15-20% EPS CAGR over the next 3-5 years, particularly driven by both consumer businesses.

“We reiterate BUY as we expect its net debt to decline gradually because capex will not only moderate (₹1.2 lakh crore-₹1.4 lakh crore per annum versus ₹2.3 lakh crore in FY23 and ₹1.3 lakh crore in FY24 and FY25) but, importantly, also be fully funded by a gradual increase in internal cash generation,” it said.

Similarly, Emkay has maintained its ‘BUY’ rating on Reliance Industries, noting the management’s positive outlook. The brokerage highlighted that the O2C segment is expected to be supported by refinery closures in the West, while the Retail and Jio businesses are likely to accelerate, targeting a 2x EBITDA growth over the next 4-5 years across the group. Additionally, the new energy ecosystem is expected to become fully operational within 4–6 quarters, backed by strategic partnerships and a self-funded model over the coming years. 

“RIL is confident of doubling EBITDA across the group by the end of this decade, and growth guidance on Jio and Retail, of doubling earnings in 3-4 years, is reaffirmed,” it said.

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