Target: ₹1,785
CMP: ₹1,448.05
Reliance Industries’ headline Q2-FY26 results were not very different from our estimates, but we came back positive from the analyst meet. Retail sales growth (19 per cent y-o-y) hit a seven-quarter high, aided by a pivot from scheduled deliveries to quick commerce (QC). Jio has been relatively silent in the high-growth QC market, but it has now added 600 dark stores to fill the coverage gaps in its 3,000+ retail stores across 1,000 cities and is now delivering most products within 30 minutes.
Jio AirFiber is expanding the home broadband market by addressing availability, affordability and use cases. New energy, data centers, and consumer products should help broad-based growth beyond retail and telecoms.
Reliance Jio’s revenue grew 12.4 per cent y-o-y, driven by strong revenue growth in mobility and scale-up of the home broadband business. RJIL has added 6 million home broadband subscribers in H1-FY26 and expects further acceleration as it moves towards its target of 100 million home subscribers.
Reliance Retail saw strong all-round revenue growth, with 23 per cent growth for grocery, 22 per cent for consumer electronics, and 18 per cent for fashion.
Upside Risks: Ramp-up of the retail business, larger-than-expected benefits from tariff hikes, higher visibility on the profitability of the new energy businesses, and likely IPOs of Reliance Retail and Jio. Downside risks: Slowdown in consumer retail, delay in tariff hike, and higher-than-expected pressure on refining margins for the O2C business.