Reliance Industries Shares Dip Over 1% After Q4 Results: What Brokerages Like Goldman Sachs and Morgan Stanley Are Saying
Shares of Reliance Industries fell more than 1% in early trading on Friday after the company reported a 13% year-on-year drop in its fourth-quarter net profit. The decline came even as the company posted strong revenue growth for the same period. Investors reacted cautiously to the mixed results, but several top brokerages remain positive on the stock’s long-term prospects.
Reliance Industries, India’s largest company by market value, reported a consolidated net profit of around ₹19,000 crore for the quarter ended March 2025. This was lower than the ₹21,800 crore profit reported in the same quarter last year. The drop was mainly due to weakness in its oil-to-chemicals (O2C) business and higher finance costs. However, revenue from operations rose by about 8% to ₹2.4 lakh crore, driven by strong performance in its retail and digital services segments.
Why Did Reliance Shares Fall?
The stock fell over 1% to around ₹2,800 on the National Stock Exchange. Traders said the profit miss disappointed some market participants who were expecting better numbers. The O2C segment, which includes refining and petrochemicals, saw margins shrink due to lower global refining margins and weaker demand for petrochemical products. This weighed on overall profitability.
Despite the near-term pressure, many analysts believe the worst may be over for the O2C business. They expect margins to improve in the coming quarters as global demand recovers and new capacity additions slow down. The company’s retail arm, Reliance Retail, continued to show steady growth with a 12% rise in revenue. Its digital services business, Jio Platforms, also reported a 10% increase in revenue, driven by higher subscriber additions and average revenue per user.
What Are Global Brokerages Saying?
Goldman Sachs maintained a “buy” rating on Reliance Industries with a target price of ₹3,200. The brokerage said the Q4 results were largely in line with its estimates, and it sees recovery potential in the O2C segment. Goldman Sachs also highlighted the strong performance of retail and digital businesses, which it believes will continue to drive long-term growth.
Morgan Stanley also kept an “overweight” rating on the stock with a target of ₹3,150. The brokerage noted that near-term pressures in energy and petrochemicals are likely to persist, but the company’s diversified business model provides a cushion. Morgan Stanley expects margins to improve gradually as global economic conditions stabilize.
Other brokerages like CLSA and Jefferies also remain positive. CLSA has a “buy” rating with a target of ₹3,250, citing the company’s strong balance sheet and growth in new energy businesses. Jefferies maintained a “hold” rating with a target of ₹2,900, saying the stock is fairly valued at current levels but could see upside if O2C margins recover faster than expected.
What Should Investors Do?
For long-term investors, the recent dip in Reliance shares could be a buying opportunity. The company’s retail and digital businesses are growing steadily and contribute a larger share of profits each year. Its new energy business, which includes solar and battery manufacturing, is also expected to start contributing meaningfully from next year.
However, investors should be aware of near-term risks. Global economic uncertainty, volatile oil prices, and weak petrochemical demand could keep pressure on the O2C segment for a few more quarters. The company’s high debt levels also remain a concern, though it has been reducing debt through asset sales and strong cash flows.
In summary, Reliance Industries remains a strong long-term bet for most investors. The Q4 results were mixed, but the company’s diversified portfolio and recovery potential in key segments make it a stock worth holding. As always, investors should consult their financial advisors before making any decisions.
