Reliance Q2 Results: Key Takeaways and Stock Market Outlook

Reliance Industries Limited (RIL) has announced its Q2 FY25 financial results, reflecting mixed outcomes across its businesses. The conglomerate, led by Mukesh Ambani, reported a decline in net profit due to underperformance in its oil-to-chemicals (O2C) segment and weaker growth in its retail division. The results are closely monitored by investors as they assess how the stock will perform when markets open on October 15.

This blog provides a detailed breakdown of RIL’s quarterly performance, technical market outlook, and guidance on whether investors should buy, hold, or sell Reliance shares.

Q2 FY25 Financial Performance Summary

Reliance’s consolidated net profit for Q2 FY25 stood at ₹16,563 crore, marking a 4.7% decline compared to the same quarter last year. Revenue from operations remained stable at ₹2,35,481 crore, reflecting flat growth. The company managed to grow its EBITDA by 2% year-on-year to ₹43,934 crore, but the EBITDA margin contracted to 17% from 17.5%.

Key Figures at a Glance:

• Net Profit: ₹16,563 crore (-4.7% YoY)
• Revenue: ₹2,35,481 crore (flat YoY)
• EBITDA: ₹43,934 crore (+2% YoY)
• EBITDA Margin: 17% (vs. 17.5% in Q2 FY24)
• Total Debt: ₹3,36,337 crore (vs. ₹2,95,687 crore YoY)

Mukesh Ambani, Chairman and Managing Director of Reliance, commented on the results, noting that growth in digital services and upstream businesses provided resilience amid unfavorable conditions impacting the O2C division.

Sector-wise Breakdown of Performance

1. Oil-to-Chemicals (O2C)

Reliance’s core O2C segment reported weaker earnings due to global demand-supply imbalances and lower refining margins. The company’s performance in this sector, a major revenue driver, was hampered by reduced crude prices and slower industrial recovery across key markets.

2. Retail Division

The retail segment underwhelmed in Q2, with growth slowing due to reduced consumer spending in some categories. Analysts pointed out that inflationary pressures and rising competition from e-commerce giants have limited Reliance’s retail expansion in both physical and online channels.

3. Digital Services and Jio Platforms

On the bright side, Reliance’s Jio arm continued to thrive, with steady subscriber growth and higher average revenue per user (ARPU). This helped cushion the impact of sluggish performance in other segments. The company reported robust growth in upstream operations, with higher gas production contributing to earnings.

Debt and Leverage Update

Reliance reported a total debt of ₹3,36,337 crore, reflecting an increase from ₹2,95,687 crore recorded a year earlier. While the company’s borrowing rose, Reliance maintains a healthy liquidity position, backed by strong cash flows from its digital and energy businesses.

Stock Market Reaction and Technical Outlook

Investors will closely watch RIL’s stock on October 15, as the earnings report is expected to affect the share price. On Monday, the stock closed at ₹2,745.20, gaining 0.11%. However, technical indicators suggest caution moving forward.

Technical Analysis

According to Kushal Gandhi, a technical analyst at StoxBox, Reliance shares are currently trading in a consolidation range of around 15%. The stock remains below its 200-day moving average (MA), which stands at ₹2,912, a level that now serves as immediate resistance.

• Support Range: ₹2,705–₹2,810
• Resistance: ₹2,912 (200-day MA)

Gandhi advises investors to wait for the stock to reclaim the 200-day MA before initiating new buy positions. He noted that despite favorable risk-to-reward ratios, the stock’s relative strength against the Nifty50 remains weak. Other technical indicators suggest limited buyer demand in the short term.

Should You Buy, Hold, or Sell RIL Stock?

Given the mixed financial performance and cautious technical outlook, analysts recommend investors hold their positions or wait for clarity before buying the stock. A decisive breakout above ₹2,912 could indicate a potential rally. However, the current market environment demands prudence, as global economic conditions remain uncertain, which could impact O2C margins further.

Key Considerations for Investors:

Hold: Existing investors are advised to hold their positions, monitoring for a breakout.

Wait: New investors should wait for the stock to breach the 200-day MA.

Sell: Consider selling if the stock falls below the support zone at ₹2,705, as this could signal further downside risk.

Conclusion: Reliance in a Transition Phase

Reliance Industries is navigating a challenging phase, with weaker O2C performance and a slowing retail division counterbalancing the gains from its digital services and upstream operations. While the company remains financially sound, its near-term stock performance hinges on market sentiment and global economic recovery.

Investors are encouraged to exercise caution and follow technical indicators closely before making investment decisions. For now, holding the stock or waiting for a technical confirmation remains the safest strategy.

Disclaimer: The views expressed in this blog are for informational purposes only. Please consult a certified financial advisor before making any investment decisions.

Reference From: www.livemint.com