Reliance Industries investors are having a tough time in 2026 so far. The stock has lagged the market and has lost about Rs 3.53 lakh crore of investor wealth this year, prompting focus on whether the June quarter results can help revive sentiment.
RIL shares have been under pressure for most of the year as investors weighed slowing retail growth, weakness in the oil and gas business, pressure on the refining cash cow and lack of strong stimulus from the company’s consumer business. The stock was recently trading nearly 20% below its 52-week high of Rs 1,611.20 hit on January 5.
The concern isn’t limited to just one business. Reliability is currently measured across four major verticals: petrochemicals, Jio, retail and oil and gas. In recent quarters, not all of them fired at the same time.
The company missed profit forecasts over the past several quarters as retail earnings slowed and its oil and gas segment was hit by lower production and lower prices. Retail profits were also impacted by holiday discounts, investments in hyperlocal delivery startups and the impact of the new labor code.
The oil and chemicals business, long Reliance’s biggest source of revenue, is facing its own questions. Reuters Breakingviews reported in April that Reliance shares lagged the broader market as the Iran conflict weighed on oil refining, while unexpected taxes, high freight costs and Chinese competition were among challenges for the business.
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Will the stock’s first-quarter results hold up?
The answer depends on whether Reliance delivers stable quarterly earnings. A strong O2C imprint can help. Jio can maintain profits. But for a real rating overhaul, investors may need stronger retail earnings, a clear timing for Jio’s IPO and confidence that mining weakness is manageable.
Also read: Jio Financial Q1 results: Profits up 155% year-on-year to Rs 830 crore
Against this background, the results of the first quarter will be important. Brokers expect Reliance to report a strong quarter, supported by O2C recovery and continued growth in digital services. Retail trading may remain subdued, and oil and gas may fall due to lower production.
The stock has already disappointed to some extent. If results show widespread improvement and management’s comments sound confident, RIL could see sharp growth. If growth is again driven solely by O2C and retail remains weak, the market may wait longer before turning in a bullish direction.
O2C can do the heavy lifting
O2C business is expected to be the main driver of the quarter. Kotak Equities expects RIL’s consolidated EBITDA to grow 8.4% YoY and 5.4% QoQ. O2C EBITDA is expected to increase 12.1% year over year and 12% sequentially.
Kotak expects the segment to benefit from strong refinery earnings in SEZs, no windfall tax implications, ethane-based petrochemicals in the US and a weak rupee.
Jeffries takes a clearer view of this segment. Consolidated EBITDA is expected to grow 10% year-on-year and O2C EBITDA to increase 20%. The brokerage expects the business to benefit from improved petrochemical spreads and higher gross refining margins for the SEZ refinery.
YES Securities expects throughput to decline 7.2% year-on-year and 2.3% quarter-on-quarter to 16.8 million metric tons. Gross refining profits are expected to be $10 per barrel.
JP Morgan said refining and petrochemicals margins were very strong in the first quarter. He noted that Reliance shut down one of its four crude oil processing units for maintenance during the quarter, but the volume loss could be offset by a weaker rupee.
Motilal Oswal expects standalone EBITDA to be Rs 14,800 crore, up 12% year-on-year. Production for sale is expected to be 17.7 million tonnes, up 2% from a year earlier.
Jio remains stable support
Digital services are expected to remain a source of cleaner growth. Nuwama expects digital EBITDA to grow 11% year-on-year and 2% quarter-on-quarter, supported by higher average revenue per user and new subscribers.
Nuvama expects ARPU to grow 3% YoY and 1% sequentially, while subscriber numbers are expected to grow 7% YoY and 2% QoQ. YES Securities expects telecom ARPU to be Rs 215.4 and subscriber count of 531.6 million.
For investors, Jio’s comments will matter as much as the numbers. The market will be looking for signs of future tariff hikes, 5G monetization, broadband growth and any updates to Jio’s listing roadmap. Earlier this year, it was reported that Jio was preparing for a major IPO and the listing was seen as a possible trigger for Reliance’s valuation.
Retail still needs to prove itself
Reliance Retail remains a key challenge. Kotak expects retail EBITDA to grow 5.6% year-on-year but decline 2.6% quarter-on-quarter. Retail revenue growth is expected to be around 12%.
Nuwama expects retail EBITDA to grow 3% year-on-year, citing pressure on margins and weak consumption trends. Jeffries expects retail revenue to grow 11% and EBITDA to grow 8%. YES Securities expects retail revenue to grow 16% year-on-year to Rs 97,700 crore, but decline 0.8% sequentially.
The retail business was once seen as a major reason for a stock re-rating. Now investors need evidence of profitable growth. Store expansion, foot traffic, grocery store performance, fashion and lifestyle sales, and margin comments will be closely watched.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by experts are their own. They do not reflect the views of The Economic Times)