Reliance shares surge nearly 8% as Q2 net profit hits record Rs 29,550 crore

Monday was a notable day for both Reliance Industries and the stock market. As trading opened, the Reliance share climbed sharply and rose nearly 8%. It was the top gainer on the Nifty 50, and it was also the most heavily traded stock on both the NSE and the BSE.

At 10 am, Reliance was trading at Rs 1,252, up 7.5%. At that price the company's market capitalisation reached Rs 16.94 lakh crore.

Reliance did not rise alone; it pulled the whole market up. At 10.45 am the Sensex was up 1,050 points, or 1.4%, at 75,509. The Nifty also gained 290 points to reach 23,343. A large part of the day's rally was due to Reliance.

The jump follows the company's quarterly results. In the July-September quarter, Q2 FY27, Reliance posted its biggest profit ever. Both revenue and profit were at record levels.

The company's total revenue rose 28% to Rs 3.62 lakh crore, the highest ever. EBITDA rose 24% to Rs 62,409 crore. Net profit rose 34% to Rs 29,550 crore, or about Rs 30,000 crore in a single quarter.

The biggest contribution came from the oil-to-chemicals (O2C) business. Its revenue rose 44.2% to Rs 2.32 lakh crore and its EBITDA rose 67.9% to Rs 25,203 crore. The crack, the profit on making petrol and diesel, is 3 to 3.7 times what it was a year ago and is at a historic high.

Jio is also doing well. Jio Platforms' revenue rose 11.3% to Rs 47,485 crore and its EBITDA rose 16.6% to Rs 21,879 crore. The business benefited from new subscribers, higher revenue per subscriber and a wider reach of digital services.

After such strong results, the major brokerages are pleased. Goldman Sachs and Nomura have both issued a BUY rating. Goldman Sachs has set a target price of Rs 1,840. The share closed at Rs 1,164 on Friday, and according to Goldman there is a further 58% upside from there. It said the company's EBITDA was 9% above its estimate, and that the reason was entirely O2C.

Nomura has set a target of Rs 1,560. It also said refining profit is the highest in several decades. The company's total EBITDA is up 19% on a sequential basis.

Both brokerages also flagged a caution. Refining profit may dip slightly in the December quarter because the cost of bringing in crude oil, the VLCC freight, has risen. The retail business is a little weak because festive shopping has been pushed later and spending on digital has risen. Even so, they said Reliance will run faster on the strength of its telecom and oil businesses.