Reliance Jumps 7% After Q2 Results, Sharpest Intraday Rally in 3 Years

Reliance’s Earnings Beat Puts Its Oil-to-Chemicals Engine in Focus

A record quarter lifted the shares, but uneven performance across Reliance’s businesses remains central to the investment case.

A rare rally followed a broad earnings beat

Reliance Industries (RIL) rose as much as 7.12% to ₹1,246.45 in Monday’s intraday trade on the BSE, its sharpest such advance in nearly three years. The move followed a strong second-quarter performance for the quarter ended September 2026. At 10:04 a.m., the stock was the biggest gainer in the Sensex and Nifty 50, up 6.1%, while both benchmark indices had risen 1.2%.

Trading was unusually active, with 42.59 million shares changing hands across the NSE and BSE. The scale of the share-price response reflects the importance investors placed on the earnings surprise, though one session’s rally does not by itself establish that the company’s performance will improve evenly across its businesses.

O2C supplied most of the incremental growth

Consolidated net sales rose 29.8% year on year to a record ₹3.31 trillion, ahead of the ₹3.14 trillion estimate cited in the report. Net profit attributable to owners increased 40.6% to a record ₹25,548 crore, compared with ₹18,165 crore a year earlier and ₹20,946 crore in the previous quarter. Reported net profit was ₹29,550 crore, up 33.8% year on year. Revenue and profit before interest, depreciation and taxes also reached record levels.

Higher transportation fuel and downstream petrochemical prices helped drive the performance. Reliance’s oil-to-chemicals (O2C) division accounted for a little over 80% of the year-on-year increase in consolidated gross revenue and earnings before interest and taxes. That contribution explains the strength of the quarter, but also makes the durability of O2C profitability an important variable for investors. Jefferies said refining infrastructure damage in the Middle East and Russia could support O2C profitability in winter; that remains an analyst view, not a company guarantee.

Retail remained the softer part of the result

Reliance Retail’s revenue grew 5.8% to ₹80,220 crore, with the festive season shifting to the third quarter from the second quarter last year. Yet operating EBITDA fell 11.1% to ₹5,886 crore, and the margin narrowed by 140 basis points to 7.3%. The company faced planned digital-commerce investment and inflationary pressures. Higher depreciation and interest costs also contributed to a 24% decline in profit after tax to ₹2,611 crore.

The contrast matters: strong O2C earnings lifted the group result, while retail’s weaker profit performance shows why investors may look beyond consolidated growth. Equirus Securities pointed to sustained retail performance and timely execution in New Energy as factors that could help unlock a further re-rating. Motilal Oswal also identified a recovery in retail growth and profitability as important to the share-price outlook.

Broker optimism still hinges on execution

Jefferies raised its consolidated EBITDA estimates for FY27 and FY28 by 6% and 2%, respectively, and maintained a Buy rating with a ₹1,710 target price. Equirus retained a Long rating, citing improved risk-reward after the share’s recent correction. Motilal Oswal reiterated Buy with a revised ₹1,520 target, down from ₹1,560, and argued that the implied holding-company discount on Reliance’s stake in Jio Platforms was excessive.

Motilal Oswal sees digital services as a major potential growth driver, while highlighting tariff changes, wireless market-share gains and the expansion of Homes and Enterprise offerings. These are brokerage expectations, not assured outcomes. The differing target prices also illustrate how assumptions about O2C earnings, Jio growth and retail recovery can shape valuation views.

Key Highlights

• RIL advanced 7.12% to ₹1,246.45, its sharpest intraday rise in nearly three years.
• Consolidated net sales reached ₹3.31 trillion, while profit attributable to owners rose 40.6% year on year.
• O2C contributed a little over 80% of the year-on-year increase in consolidated gross revenue and EBIT.
• Retail revenue grew, but operating EBITDA, margin and profit after tax declined.
• Analysts cited retail recovery and execution in New Energy among the factors investors should watch.

Investor Note: The results provide evidence of strong earnings momentum, but the quarter’s dependence on O2C and the weakness in retail make business mix and execution important considerations. Investors should weigh brokerage targets against their own assessment of whether the earnings drivers can be sustained.