RIL shares jump 6% as company reports record quarterly performance
What's the story
Shares of Reliance Industries Limited (RIL) jumped 6% to ₹1,238.70 today, following the company's strongest-ever quarterly performance. The conglomerate reported record revenue and a significant increase in profitability for the September quarter. RIL's revenue increased to ₹3.62 lakh crore from ₹3.4 lakh crore in the previous quarter on a sequential basis. The company's consolidated profit after tax (PAT) for H1 FY27 also crossed the ₹50,000 crore mark.
Financial performance
EBITDA stood at ₹62,409 crore
RIL's EBITDA also saw a significant jump, rising to ₹62,409 crore from ₹54,067 crore in the previous quarter.
The company's operating profit margin (OPM) improved to 18.8% from 17.3%.
Net profit for Q3 stood at ₹29,550 crore as against ₹23,196 crore in the June quarter.
This stellar financial performance has led Goldman Sachs to maintain its 'Buy' rating on Reliance Industries with a target price of ₹1,840 per share.
Business performance
Oil-to-chemicals business drives outperformance
Goldman Sachs noted that Reliance Industries's Q2FY27 EBITDA stood at ₹56,600 crore, up 19% sequentially and 23% year-on-year.
The outperformance was mainly driven by a strong showing in the oil-to-chemicals (O2C) business, which more than offset weaker earnings from the retail segment.
The brokerage firm expects refining margins to moderate sequentially in Q3 due to elevated very large crude carrier (VLCC) freight costs but believes Reliance's ability to process discounted heavy crude barrels could cushion some of this pressure.
Future prospects
Weakness in retail business; progress on new energy front
The retail business remained a weak spot for Reliance Industries, with EBITDA declining 11% year-on-year.
However, on the new energy front, Reliance's solar module and cell manufacturing capacities currently stand at 6 GW and 5 GW, respectively. Both are on track to scale up to 20 GW in H1 next year.
The company is also making progress on upstream integration across polysilicon, ingots, wafers, and glass.