Reliance Shares Climb Over 7%, Poised for Best Single-Day Gain Since January 2024: Key Factors Behind the Rally
Shares of Reliance Industries surged over 7% in early trading on Monday, reaching Rs 1,246.45 on the BSE after the company announced a record quarterly profit for the July-September period. The stock’s rally added Rs 1,00,208.45 crore to Reliance’s market capitalization, bringing it to Rs 16.74 lakh crore. The gains followed a strong performance in the September quarter, with consolidated profit rising 33.8% year-on-year to Rs 29,550 crore.
Strong Financial Performance
Net profit attributable to the owners of Reliance increased by 40% to Rs 25,548 crore. Consolidated revenue also saw a significant rise, climbing 27.8% to Rs 3.62 lakh crore. Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached a record Rs 62,409 crore, up 23.9% from the previous year. The oil-to-chemicals (O2C) segment was the primary driver of this performance, with its EBITDA jumping 67.9% to Rs 25,203 crore and revenue increasing 44.2% to Rs 2.32 lakh crore.
Market Impact and Analyst Insights
The rally in Reliance shares contributed to a broader market increase. At 10:24 am, the BSE Sensex was up 935.82 points at 75,390.02, while the NSE Nifty gained 248.15 points to reach 23,300.05. Jefferies noted that the O2C segment “hit the bullseye,” attributing the success to record crude processing and a shift towards higher-value fuel exports. Following the strong results, the brokerage raised its earnings forecasts for Reliance.
Emkay Global also highlighted the recovery in the O2C segment and improving profitability at Jio as key factors behind the earnings beat. The firm raised its estimates and maintained that Reliance’s stock valuation remains attractive. However, the retail segment showed weaker performance, with Reliance Retail’s gross revenue increasing by only 6.4% to Rs 91,716 crore, and EBITDA before a one-time impairment charge declining 8.6% to Rs 6,228 crore.
