Reliance Industries Q2FY26: Strong Core Performance Led by Jio and Retail, Says CLSA
Reliance Industries Limited (RIL) posted robust Q2FY26 earnings with consolidated EBITDA rising 4% above CLSA’s forecast, supported by strong telecom and retail performance. Both revenue and EBITDA for Reliance Retail grew in the high-teens, marking a return to consistent double-digit expansion. CLSA reiterated its “Outperform” rating with a 12-month price target of ₹1,650, indicating a 16% upside from current levels of ₹1,416.95.
The report highlights that Jio’s subscriber addition, retail network expansion, and FMCG scale-up were key growth drivers. With improving KPIs across verticals and strong cost control, RIL continues to demonstrate its ability to sustain growth even amid macro headwinds.
CLSA Rating Summary
| Parameter | Details | Remarks |
|---|---|---|
| Rating | Outperform | Maintained due to attractive risk-reward |
| Target Price | ₹1,650 | 16% upside potential |
| Current Market Price | ₹1,416.95 | As of 20 October 2025 |
| Analyst | Vikash Kumar Jain, CLSA India | Energy & Conglomerates Analyst |
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Quarterly Highlights
Reliance’s 2QFY26 standalone PAT stood at ₹91,138 crore, up 18% year-on-year (YoY) and 2% sequentially (QoQ). EBITDA margin improvement was led by Jio and Retail, even as O2C (oil-to-chemicals) remained stable. The company added over 8.3 million broadband subscribers and expanded its retail network with 229 new stores in the quarter.
| Metric | Q2FY26 | YoY / QoQ Change |
|---|---|---|
| Revenue | ₹10,961,721 crore | ▲13.6% YoY |
| EBITDA | ₹1,502,449 crore | ▲10.4% YoY |
| Net Profit | ₹793,328 crore | ▲13.9% YoY |
| Net Debt | ₹1.21 lakh crore | ▼2% QoQ |
Strong retail growth of 19% YoY was complemented by Jio’s sustained subscriber additions. Quick commerce and FMCG units also registered double-digit growth. Reliance’s broad-based performance reflects a solid shift toward consumer and technology-led earnings visibility.
Peer Comparison in the Energy & Telecom Space
| Company | Revenue Growth (YoY) | EBITDA Margin (%) | ROE (%) |
|---|---|---|---|
| Reliance Industries | 13.6 | 13.7 | 14.2 |
| Adani Enterprises | 9.5 | 10.9 | 11.4 |
| Bharti Airtel | 11.3 | 17.8 | 13.6 |
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Understanding Key Terms
- EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization — measures operational profitability before accounting for non-cash and financing costs.
- O2C: Oil-to-Chemicals segment — includes refining, petrochemicals, and other related operations.
- ARPU: Average Revenue Per User — a key telecom metric showing average income per subscriber.
- Net Debt: Total borrowings minus cash — a measure of the company’s leverage.
SWOT Analysis
| Strengths | Weaknesses |
|---|---|
| Diverse business portfolio across energy, telecom, and retail. | High capital expenditure requirements. |
| Market leadership in retail and Jio’s subscriber base expansion. | Margin pressure in O2C segment due to global oil dynamics. |
| Opportunities | Threats |
|---|---|
| Growth in renewable energy and quick commerce segments. | Regulatory risks in telecom and energy sectors. |
| AI and digital commerce expansion. | Volatility in global crude oil prices. |
Final Verdict
Reliance Industries has once again proven its ability to deliver strong, broad-based growth. The Retail and Jio segments continue to outperform, compensating for the slower O2C business. With its focus on energy transition, digital services, and retail scale-up, the conglomerate remains well-positioned for multi-year earnings expansion. CLSA’s valuation reflects confidence in the company’s execution and its ability to sustain superior return metrics over the medium term.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, notes that Reliance Industries’ Q2FY26 results reaffirm its leadership in diversified growth. Jio’s expanding ARPU and retail’s consistent execution provide strong visibility for FY26–27 earnings. The stock remains a steady compounder for investors with medium- to long-term horizons. Discover more market-based research insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries
- What drove Reliance Industries’ Q2FY26 profit growth?
- How significant are Jio and Retail in Reliance’s overall valuation?
- Will renewable and AI businesses boost future earnings for Reliance?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment adviser before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
