Reliance Industries shares dip over 1% after Q4 results. What are Goldman Sachs, Morgan Stanley, others saying?

Shares of Mukesh Ambani-led Reliance Industries declined over a per cent to their day’s low of Rs 1,311 on the NSE on Monday after it reported a 13% year-on-year decline in consolidated net profit at Rs 16,971 crore for the fourth quarter of FY26, compared with Rs 19,407 crore in the same period last year.

Revenue from operations during the quarter rose 13% YoY to Rs 2.98 lakh crore. On a sequential basis, profit slipped 8% from Rs 18,645 crore reported in the December quarter. Operating performance remained largely flat, with EBITDA easing 0.3% YoY to Rs 48,588 crore. EBITDA margin declined 200 basis points from the year-ago period to 14.9%.

Jio Platforms delivered a strong quarter, with operating revenue rising 13% YoY to Rs 44,928 crore. Reliance Retail posted a marginal increase in profitability for the March quarter. Net profit rose 0.5% YoY to Rs 3,563 crore, while revenue from operations climbed 11% to Rs 87,344 crore.

The O2C business reported mixed trends in Q4. Revenue increased 12% YoY to Rs 1.84 lakh crore, while EBITDA fell 4% to Rs 14,520 crore. The oil and gas segment had a weaker quarter, with revenue declining 9% YoY to Rs 5,867 crore. EBITDA dropped 18% to Rs 4,195 crore. JioStar reported strong performance, with revenue of Rs 9,784 crore and EBITDA, including other income, of Rs 827 crore.

Reliance Industries share: Should you buy, sell or hold?

Morgan Stanley has maintained its Overweight rating on Reliance Industries with an unchanged target price of Rs 1,803, implying an upside potential of 35%. The brokerage said earnings were largely in line, though EBITDA was slightly below expectations due to higher upstream costs. It highlighted strong retail growth led by quick commerce and FMCG, while O2C margins remained weaker than peers but were improving due to better crude sourcing trends. Morgan Stanley added that chemicals and fuel markets are showing early signs of recovery.

The brokerage noted that capex remains elevated with a focus on new energy. It said any rerating in the stock would depend on margin improvement across segments and continues to view Reliance as a top pick, with recovery in the energy and retail businesses seen as key triggers.
Goldman Sachs has maintained its Buy rating on Reliance Industries with an unchanged target price of Rs 1,910. The brokerage said Q4 EBITDA missed estimates mainly due to weaker O2C margin capture, as high crude premiums and elevated logistics costs offset the benefit of strong product cracks. It noted that the petrochemical business delivered mixed performance, with pressure continuing in the naphtha chain. However, Goldman Sachs expects sequential margin recovery in the coming quarters.The brokerage added that retail growth remained strong, although margins were impacted by quick commerce. It believes Reliance’s integrated business model is well placed to benefit from a tightening downstream environment, with earnings recovery likely to be driven by normalisation in refining and chemicals.

Motilal Oswal Financial Services has maintained its Buy rating on Reliance Industries while reducing the target price to Rs 1,655, implying a potential upside of 25%. The brokerage has cut its FY27E EBITDA and PAT estimates by 3-4% due to challenges in the energy business and delays in tariff hikes at Jio. It expects Jio to remain the company’s biggest growth driver, with digital expected to contribute around 80% of Reliance’s incremental EBITDA. EBITDA is projected to grow at an 18% CAGR over FY26-28E, supported by an expected wireless tariff hike of around 15% in 2Q, market share gains in wireless, and continued expansion of Homes and Enterprise offerings.

It also expects Reliance Retail to deliver around 12% revenue CAGR over FY26-28E, driven by store additions, better productivity, and the scale-up of hyper-local offerings. However, it noted that faster growth in lower-margin businesses could weigh on blended EBITDA margins.

Elara Capital has upgraded Reliance Industries to Buy while revising its target price downward to Rs 1,619. The brokerage said weak O2C margin capture weighed on performance despite strong product cracks. It noted that the digital and retail businesses continue to provide steady growth support, though retail margins remain under pressure due to ongoing investments. At the same time, the oil and gas and O2C segments continued to drag overall performance.

Elara Capital has cut its EPS estimates because of a weaker outlook for petrochemicals and retail. However, it believes the recent correction in the stock price has already factored in near-term headwinds. The brokerage sees upside potential led by normalisation in GRMs and sustained growth in the digital business.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)