Reliance Industries Ltd (RIL) shares are experiencing a decline, currently trading around ₹1424-1425. This recent dip comes despite the company reporting robust Q1 FY26 results with a significant 78% year-on-year rise in consolidated net profit to ₹26,994 crore, largely driven by a one-time gain from the stake sale in Asian Paints.
Current Scenario and Key Observations:
* Falling Price: The stock has seen a considerable fall in the past few days, with reports indicating a crash of around 2.7% on BSE today, and a drop of over 6% in July so far.
* Q1 FY26 Performance:
* Net Profit: RIL reported its highest-ever consolidated net profit of ₹26,994 crore for Q1 FY26, significantly beating market estimates.
* Revenue: Revenue from operations increased by 5.3% to ₹2,48,660 crore.
* EBITDA: Consolidated EBITDA jumped 36% to ₹58,024 crore, with EBITDA margin improving to 21.2%.
* Segmental Performance:
* Jio Platforms: Reported a strong 23.9% YoY increase in EBITDA, driven by ARPU growth and operational efficiency. Jio has also surpassed 200 million 5G subscribers.
* Reliance Retail: Posted an 11.3% YoY increase in revenue, though some reports indicate a slowdown in consumer electronics sales and space addition lagging expectations.
* Oil-to-Chemicals (O2C): Saw a slight revenue decline due to weaker crude prices and planned maintenance, but EBITDA climbed due to improved transportation fuel margins.
* Analyst Outlook: Despite the recent fall, many major brokerages have maintained "Buy" or "Overweight" ratings on RIL, with target prices generally ranging from ₹1500 to ₹1767. They remain sanguine about RIL's long-term growth prospects, especially in the New Energy segment, Jio, and Retail.
* Growth Drivers:
* New Energy: RIL is heavily investing in the new energy sector, with plans to commission giga-factories for solar PV, fuel cells, and batteries over the next 4-6 quarters, aiming for a self-funded platform and perpetual growth.
* Digital Services: Continued expansion and growth in Jio Platforms, including 5G deployment and broadband connections.
* Retail Expansion: Ongoing growth and diversification within the retail segment.
* Debt: While the net profit was record-breaking, net debt has slightly increased, reflecting capex intensity in digital infrastructure, new energy, and retail expansion.
Investment Consideration with Stop Loss:
Given the current falling price at ₹1424 and your stated stop loss limit of not more than 5% of your total portfolio, this indicates a cautious approach. While the stock has corrected, many analysts see this as a potential buying opportunity due to strong fundamentals and future growth drivers, especially in the New Energy and Digital segments.
However, it is crucial to consider:
* Volatility: RIL stock is currently exhibiting some volatility.
* Market Sentiment: The broader market conditions and immediate investor reaction to the Q1 results seem to be weighing on the stock despite the strong underlying performance.
* Risk Management: Adhering to your 5% portfolio stop loss is a prudent strategy to mitigate potential downside risk in a volatile market.
Current Scenario and Key Observations:
* Falling Price: The stock has seen a considerable fall in the past few days, with reports indicating a crash of around 2.7% on BSE today, and a drop of over 6% in July so far.
* Q1 FY26 Performance:
* Net Profit: RIL reported its highest-ever consolidated net profit of ₹26,994 crore for Q1 FY26, significantly beating market estimates.
* Revenue: Revenue from operations increased by 5.3% to ₹2,48,660 crore.
* EBITDA: Consolidated EBITDA jumped 36% to ₹58,024 crore, with EBITDA margin improving to 21.2%.
* Segmental Performance:
* Jio Platforms: Reported a strong 23.9% YoY increase in EBITDA, driven by ARPU growth and operational efficiency. Jio has also surpassed 200 million 5G subscribers.
* Reliance Retail: Posted an 11.3% YoY increase in revenue, though some reports indicate a slowdown in consumer electronics sales and space addition lagging expectations.
* Oil-to-Chemicals (O2C): Saw a slight revenue decline due to weaker crude prices and planned maintenance, but EBITDA climbed due to improved transportation fuel margins.
* Analyst Outlook: Despite the recent fall, many major brokerages have maintained "Buy" or "Overweight" ratings on RIL, with target prices generally ranging from ₹1500 to ₹1767. They remain sanguine about RIL's long-term growth prospects, especially in the New Energy segment, Jio, and Retail.
* Growth Drivers:
* New Energy: RIL is heavily investing in the new energy sector, with plans to commission giga-factories for solar PV, fuel cells, and batteries over the next 4-6 quarters, aiming for a self-funded platform and perpetual growth.
* Digital Services: Continued expansion and growth in Jio Platforms, including 5G deployment and broadband connections.
* Retail Expansion: Ongoing growth and diversification within the retail segment.
* Debt: While the net profit was record-breaking, net debt has slightly increased, reflecting capex intensity in digital infrastructure, new energy, and retail expansion.
Investment Consideration with Stop Loss:
Given the current falling price at ₹1424 and your stated stop loss limit of not more than 5% of your total portfolio, this indicates a cautious approach. While the stock has corrected, many analysts see this as a potential buying opportunity due to strong fundamentals and future growth drivers, especially in the New Energy and Digital segments.
However, it is crucial to consider:
* Volatility: RIL stock is currently exhibiting some volatility.
* Market Sentiment: The broader market conditions and immediate investor reaction to the Q1 results seem to be weighing on the stock despite the strong underlying performance.
* Risk Management: Adhering to your 5% portfolio stop loss is a prudent strategy to mitigate potential downside risk in a volatile market.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.