While the oil-to-chemicals segment may see a decline due to weaker refining margins, consumer-facing businesses such as retail and Jio are forecast to perform well.
As the company moves toward a more diversified future, investors will be closely watching key developments, including progress on the ₹75,000 crore investment in the new energy businessReliance Industries Limited (RIL) has approved a 1:1 bonus share issue, granting shareholders an additional fully paid-up equity share for each ₹10 share they hold. This will be the largest bonus share offering in India’s stock market. The exact record date for the issue is yet to be confirmed.
The record date is expected to be finalized on October 14, during a Board meeting, which will also address RIL’s unaudited financial results for the quarter and half-year ending September 30.
The bonus issue, coinciding with the festive season, has been described as an “early Diwali gift” to the company’s shareholders.
In terms of financial performance, Reliance’s second-quarter earnings for FY2025 are expected to show a mixed outlook. While the oil-to-chemicals segment may see a decline due to weaker refining margins, consumer-facing businesses such as retail and Jio are forecast to perform well.
Reliance’s retail segment is forecast to grow steadily, with its EBITDA likely increasing by 7% year-on-year. Jio is expected to deliver solid growth, driven by recent tariff hikes, with EBITDA projected to rise 12% on an annual basis.
As the company moves toward a more diversified future, investors will be closely watching key developments, including progress on the ₹75,000 crore investment in the new energy business, retail expansion, and shifts in telecom pricing.
Brokerage view:
Reliance Industries’ EBITDA could drop by 5.5% year-on-year, mainly due to weakness in the oil-to-chemicals (O2C) segment, according to Nuvama. However, strong performances in consumer-facing businesses like retail and Jio may partially offset this decline. Motilal Oswal, on the other hand, forecasts a 2% annual growth in consolidated EBITDA, reaching ₹39,700 crore. The O2C segment is expected to face a challenging quarter due to a sharp 62% year-on-year drop in Singapore refining margins, with EBITDA from this segment predicted to fall by 26-27%, to around ₹14,100 crore. The company’s oil and gas EBITDA is expected to rise 4%, driven by a 3% increase in production.
On the retail side, profitability is projected to remain strong, with EBITDA growth of 7-10% year-on-year, as per estimates from Nuvama and Motilal Oswal. Reliance Jio is also expected to post solid results, driven by recent tariff hikes. Jio’s EBITDA is forecast to rise by 12% annually, with ARPU growth of 5% helping to offset a slight drop in subscriber numbers. Both brokerages anticipate a 7% sequential increase in ARPU, reflecting steady performance in the telecom sector.
In compliance with SEBI regulations, RIL’s trading window for dealing in securities has been closed since October 1, 2024, and will remain shut until 48 hours after the financial results are announced.
Analysts see any dip in the stock price as a buying opportunity for long-term investors, as Reliance shares have already seen significant correction in recent sessions. Anshul Jain, Head of Research at Lakshmishree Investment, noted that while Reliance reported a 2% EBITDA growth in the previous quarter, net profit declined by 5%. The upcoming financial results, due on October 14, could present potential for gains if there are any positive surprises.
On the technical front, Reliance’s stock, currently trading around ₹2,744, has dropped below key moving averages. Sumeet Bagadia, Executive Director at Choice Broking, highlighted that the stock has support at ₹2,700, with resistance between ₹2,900 and ₹2,950. If the stock breaks below ₹2,700, it could fall further to ₹2,650, but a break above resistance could trigger a bullish trend. Traders should monitor these levels closely to gauge Reliance’s next move.
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