Reliance Industries Limited (RIL) has reported its Q2FY25 earnings, revealing a net profit of ₹16,563 crore, which reflects a 5% year-on-year decline. Despite challenges in its oil-to-chemicals (O2C) segment, the company showcased resilience through growth in its digital services and upstream businesses. Brokerages remain optimistic about RIL’s long-term potential, suggesting significant upside for investors.
Reliance Industries Share Price Overview
As of today, the Reliance share price is trading at approximately ₹2,740. The stock initially dipped following the earnings announcement but later stabilized. Analysts are divided yet largely bullish, with many recommending a “buy” stance based on the company’s diversified operations and growth prospects.
Performance Overview of Reliance Industries Share
RIL’s consolidated net profit for Q2FY25 was ₹16,563 crore, down from ₹17,394 crore in the same quarter last year. However, on a sequential basis, net profit rose by 9.4% compared to the previous quarter. This marks the third consecutive quarter of declining profits on a year-on-year basis, primarily attributed to weaknesses in the O2C business.The company’s total income saw a slight increase of 0.65%, reaching ₹2,40,357 crore compared to ₹2,38,797 crore in the corresponding quarter last year. RIL’s earnings before interest, tax, depreciation, and amortization (EBITDA) stood at ₹43,934 crore for the second quarter, reflecting a 2% decrease year-on-year. The EBITDA margin for this quarter was recorded at 17%, slightly down from 17.5% in the same period last year.
Key Segment Insights of Reliance Industries Share
Mukesh Ambani, Chairman of Reliance Industries, emphasized the resilience of the company’s diversified portfolio. He noted robust growth in digital services and upstream businesses that helped offset weaker contributions from the O2C segment. The O2C business faced challenges due to unfavorable global demand-supply dynamics; however, improvements in domestic product placement and higher volumes were observed.The digital services segment showed significant promise with revised telecom tariffs contributing to increased average revenue per user (ARPU) and subscriber growth. RIL’s Jio Platforms reported a 23% increase in net profit after tax at ₹6,539 crore, with revenues improving by 18% year-on-year to ₹37,119 crore.
Brokerages’ Ratings and Future Outlook for Reliance Industries Share
Following the earnings announcement, several brokerages weighed in on RIL’s performance and future prospects:→ HDFC Securities maintained an “ADD” rating with a price target of ₹3,350 per share, indicating a potential upside of 22%. Their optimism is rooted in expectations of recovery in the O2C business and continued growth in digital services.→ Nomura assigned a “buy” rating with a price target of ₹3,450, suggesting an almost 26% upside. They anticipate growth from upcoming tariff hikes for Jio and new energy projects.→ CLSA kept its “outperform” rating with a target of ₹3,300 per share, implying over a 20% upside potential.→ UBS also retained its “buy” recommendation with a price target of ₹3,250 (over 18% upside), citing future growth drivers such as 5G adoption and new energy business opportunities.→ JPMorgan maintained its “overweight” stance with a price target of ₹3,125 (14% upside), anticipating continued growth in RIL’s telecom business alongside recovery in refining and retail segments.
Should I Buy or Sell Reliance Industries Share?
Current Market Sentiment
Given the mixed yet predominantly positive outlook from analysts regarding the Reliance share price, it may be prudent for investors to consider buying or holding RIL shares. The anticipated growth from digital services and new energy ventures presents a compelling case for long-term investment.
Analyst Recommendations
Investors should weigh the recommendations carefully:Buy: If you believe in RIL’s diversified operations and long-term growth potential.
Hold: If you currently own shares but are cautious about short-term fluctuations.
Sell: If you are risk-averse and prefer to avoid potential volatility.
Conclusion
Despite facing headwinds in its core O2C business segment, Reliance Industries continues to showcase resilience through strong performances in its digital services and upstream sectors. Brokerages remain largely bullish on the company’s long-term prospects driven by factors such as Jio’s tariff hikes and new energy projects. While near-term challenges may persist, RIL’s diversified business model positions it well to navigate economic fluctuations and capitalize on future opportunities.
Disclaimer
The views and recommendations made above are those of individual analysts or broking companies and do not represent the views of Mint. We advise investors to consult with certified experts before making any investment decisions as market conditions can change rapidly and individual circumstances may vary.
