Reliance share gains despite 22% fall in Q1 profit; Motilal Oswal retains Buy, trims target price

Track Reliance as shares rise on strong EBITDA, Jio outlook and Motilal Oswal’s Buy call despite a 22% Q1 profit drop and lower target.

Written by Sparsh Bansal

July 20, 2026 09:50 IST

Close-up of a corporate finance workstation evaluating digital and telecom business units. The digital screen tracks a multi-year dashboard illustrating Jio's 85% projected contribution to incremental EBITDA alongside growth metrics for JioMart's 5,500 pin code logistics network.

RIL shares climbed in a weak market despite a 22% drop in net profit. (Image: Canva)

Reliance Industries’ share rose nearly 1% to a high of Rs 1,341.20 on the NSE after it reported its first quarter’s earnings on Friday. The stock was among the top five gainers in the Nifty 50 in Monday’s weak market. The brokerage house Motilal Oswal Financial Services retained its ‘Buy’ rating on the stock, but slashed the 12-month price target.

Motilal Oswal on Reliance Industries

Motilal Oswal reiterated its ‘Buy’ rating on Reliance Industries, and cut the target price to Rs 1,550 from Rs 1,690, implying an upside of more than 17% from the current market price.

The brokerage house said that “rebound in energy profitability offsets softer performance in Retail.”

Reliance Industries reported a robust Q1FY27 with consolidated EBITDA, rising 8% QoQ to Rs 47,500 crore and up 11% YoY, which exceeded the brokerage’s estimate of Rs 46,100 crore. This performance was primarily driven by a strong rebound in energy profitability, oil-to-chemicals (O2C) and exploration & Production (E&P).

The O2C segment saw its EBITDA grow 17% QoQ and YoY, supported by stronger transportation fuel cracks and favourable ethane cracking economics. Simultaneously, the E&P segment’s EBITDA grew 19% QoQ, aided by improved oil realisations and cost normalisation.

Reliance Jio’s digital segment is expected to remain the company’s primary growth engine, potentially contributing almost 85% of Reliance Industries’ incremental consolidated EBITDA over FY26-28. This growth is anticipated to be driven by wireless tariff hikes, market share gains, and the continued ramp-up of Home Broadband and Enterprise offerings.

While Reliance Retail saw a weak Q1FY27 with a 2% YoY decline in operating EBITDA due to investments in digital commerce, management has set an ambitious target to double operating EBITDA over the next three years. Rapid scaling of JioMart, which now covers 5,500 pin codes, remains a key focus area.

Motilal Oswal believes that the peak of the company’s capex is now behind it, which is expected to lead to healthy free cash flow generation of around Rs 90,000 crore over FY26-28 and a corresponding decline in consolidated net debt.

Reliance Industries share price performance

The share price of Reliance Industries has risen 1.8% in the last five trading days. The stock has changed a little in the past one month. However, the stock has declined 5% in the last six months. Reliance Industries’ share price has dropped 7% over the previous 12 months.

RIL Q1FY27

The company reported a net profit of Rs 20,946 crore in Q1FY27, a decline of 22% year-over-year from Rs 26,994 crore in the same period last year.

The decline in profit came due to a fall in other income, which dropped 57% YoY to Rs 6,550 crore in the first quarter from Rs 15,119 crore in Q1FY26, as it saw sharp gains due to the sale of stake in Asian Paints.