Reliance Industries share price can go up to ₹1,890, analysts project after Q1 results

Shares of Reliance Industries Ltd. (RIL) recovered from opening lows to trade over 1% higher on Monday, July 20, after the conglomerate reported a stronger-than-expected June quarter, driven by robust performance in its oil-to-chemicals (O2C) business.

Reliance Industries crossed the ₹3 lakh crore quarterly revenue mark for the first time during the June quarter.

EBITDA rose to ₹54,067 crore from ₹49,100 crore a year ago and ₹48,588 crore in the previous quarter, supported by a sharp recovery in refining margins and strength across its energy businesses.

The O2C segment emerged as the key driver, with EBITDA rising to ₹17,010 crore from ₹14,511 crore a year ago and ₹14,520 crore in the March quarter, marking its highest quarterly operating profit in four years. The improvement was aided by stronger transportation fuel cracks, while middle distillate cracks touched record quarterly average levels.

Reliance Retail delivered an 11.6% year-on-year increase in gross revenue, adjusted for the demerger of Reliance Consumer Products Ltd. (RCPL). Meanwhile, Jio continued to post steady growth, with revenue rising 10.8% year-on-year to ₹34,212 crore and EBITDA increasing 15%.

How brokerages reacted to RIL Q1

Goldman Sachs retained its 'Buy' rating and a price target of ₹1,870. The brokerage expects the outlook for the O2C business to improve further in the September quarter as refining fundamentals remain supportive.

While it flagged near-term margin pressure in the retail business due to investments in digital commerce and hyperlocal delivery, it said progress in Reliance's new energy projects remains a key long-term catalyst.

Citi maintained its 'Buy' rating and raised its target price to ₹1,690. The brokerage highlighted stronger refining profitability, improving earnings from the oil and gas business and management's roadmap to double retail EBITDA over the next three years.

It also viewed the increase in promoter shareholding as a positive signal.

Nomura reiterated its 'Buy' rating with a target price of ₹1,690. The brokerage said the earnings beat was driven by the recovery in the energy business, while highlighting Jio's continued subscriber-led growth. It expects retail margin recovery to remain a key monitorable over the coming quarters.

CLSA retained its 'Outperform' rating and a target price of ₹1,800. The brokerage said better-than-expected O2C earnings and higher other income more than offset softer retail performance.

The brokerage also expects continued growth in the FMCG and media businesses, alongside improving profitability in retail and the ramp-up of new energy capacity.

Macquarie maintained its 'Outperform' rating with a target price of ₹1,510. It believes management's commentary points to upside potential for both the digital services and retail businesses, particularly given the company's target of doubling retail EBITDA over the next three years.

Morgan Stanley said the June quarter beat Street estimates on both earnings quality and profitability, driven primarily by strength in refining and chemicals.

The brokerage also highlighted accelerating execution in Reliance's solar and battery manufacturing initiatives.

Motilal Oswal retained its 'Buy' rating with a target price of ₹1,550. The brokerage believes a recovery in retail earnings, alongside scaling up of new businesses such as FMCG, new energy, AI and data centres, will be the key drivers for the stock going forward.

Of the 32 analysts covering Reliance Industries, 31 have a 'Buy' recommendation on the stock, while one has a 'Sell' rating.

Note To Readers

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