RIL Share Price Target: Motilal Oswal Financial Services has recommended a Buy rating on Reliance Industries Limited (RIL) shares after the Q4FY26 results. Motilal Oswal has, however, cut its RIL share price target to Rs 1,655 from Rs 1,715.
According to Motilal Oswal, RIL reported a subdued Q4, with consolidated EBITDA declining 4 per cent QoQ (flat YoY) to Rs 441 billion (vs. consensus estimates of Rs 484 billion/ Rs 469 billion), primarily driven by weaker profitability in the Energy business due to the disruptions caused by the West Asia conflict.
RIL’s consumer-facing businesses remained resilient, said the brokerage.
Reliance Retail’s revenue growth picked up to 11 per cent YoY, though EBITDA growth was modest at 3 per cent YoY (flat QoQ, 6 per cent beat), as margins contracted 60bp YoY (in line) due to the ramp-up of low-margin hyper-local deliveries.
RJio EBITDA was up 2.1 per cent QoQ (in line, 14 per cent YoY), driven by 9.1 million net subscriber additions and stable ARPU (despite two fewer days QoQ). RIL’s digital services EBITDA was up 3.7 per cent QoQ (+16 per cent YoY, in line).
Consolidated O2C EBITDA declined 12 per cent QoQ (down 4 per cent YoY, 20 per cent miss) due to increased crude sourcing premium and higher freight and insurance costs.
Motilal Oswal has cut its RIL FY27E EBITDA and PAT by 3-4 per cent, due to challenges in the Energy business and delays in tariff hikes in RJio.
Overall, the brokerage has built in a CAGR of 9-10 per cent in RIL’s consolidated EBITDA and PAT over FY26-28E.
The brokerage said that while the energy business weakness drives the near-term earnings downgrade, sustained mid-to-high teen growth in RR and a tariff hike, along with the impending JPL IPO, remain the key triggers for RIL’s stock price.
