Reliance Industries hits 18-month low; stock down 28% from January high

The stock price of RIL is quoting lower for the fourth straight trading day today. The counter has declined 5 per cent during the period.

Reliance Industries shares traded under pressure on Monday, hitting an 18-month low of ₹1,157, down 1 per cent on the BSE in intra-day deals. The stock price of the country’s most valued company in terms of market capitalisation is quoting lower for the fourth straight trading day. The stock has declined 5 per cent during the period.

 

Thus far in the calendar year 2026, RIL’s shares have slipped 26 per cent, compared to a 15.5 per cent decline in the BSE Sensex. The stock has corrected 28 per cent from its 52-week high level of ₹1,611.20, touched on January 5, 2026.

 

Why are RIL shares underperforming?

 

In the April to June 2026 quarter (Q1FY27), RIL’s gross revenue increased by 30 per cent on a Y-o-Y basis due to a sharp increase in crude oil prices. Earnings were supported by stronger transportation fuel cracks, efficient feedstock sourcing and improved downstream chemical margins, despite geopolitical and trade-related pressures.

 

However, operating profitability was comparatively constrained by lower volumes due to planned maintenance, higher crude premiums; special additional excise duty (SAED) related costs, under-recovery in domestic fuel retail and LPG diversion. Sustained domestic demand for gasoline, diesel and aviation turbine fuel (ATF), and favourable ethane cracking, supported overall segment performance.

 

Meanwhile, crude oil prices are a function of many dynamic factors such as global demand-supply dynamics, the geopolitical situation in countries with oil reserves, Organization of the Petroleum Exporting Countries (OPEC) policies, and USD exchange rates, among others. These factors have translated into high volatility in crude oil prices.

 

Geopolitical disruptions, including the Middle East conflict, also affected trade flows and product markets in the year. Dated Brent crude averaged US$104.5/bbl in Q1FY27, up US$36.7/bbl YoY. Upward revision in prices of feedstock and downturns in product prices resulting from existing or future excess industry capacities may adversely impact the company’s revenues and profitability, Care Edge Ratings said in a rationale dated September 25, 2026. Check - TOP GAINERS NSE | TOP LOSERS NSE

 

Brokerages remain bullish on RIL

 

According to analysts at Jefferies, around 4 per cent of global refinery throughput has been lost due to conflicts, resulting in diesel and gasoline inventories falling to 5-year lows. Singapore gross refining margin (GRM) prevails near a life-high as a result. The tightness could last through CY2026. Petchem spreads remain firm, supporting O2C earnings growth in FY27E, RIL trades > 1 SD below long term average, suggesting favourable risk-reward. The brokerage firm maintains a ‘buy’ rating on Reliance with a target price of ₹1,710 per share.

 

Two of the largest petrochemical facilities in Iran, along with two of the largest facilities in Saudi Arabia, have suffered damage. Naphtha exports to North-East Asia from the Middle East (4mmt per month) remain impacted. Average petchem margins (PE/PP/PET) are up 64 per cent in Q2FY27TD vs February-end, aiding Reliance's oil-to-chemical (O2C) profitability. While elevated liquefied petroleum gas (LPG) production continues to weigh on Reliance's polypropylene (PP) volumes, the restoration of KG basin gas has helped lower opex, analysts at Jefferies said.

 

Meanwhile, RIL’s historical GRM premium over domestic peers was fundamentally anchored by deeply discounted Venezuelan heavy crude, world-scale deep-conversion capability, and integrated captive logistics. This premium compressed over recent years as US sanctions curtailed Venezuelan flows, domestic public sector undertaking (PSU) refiners upgraded their complexity, and discounted Russian Urals became ubiquitously available across India, according to analysts at YES Securities.

 

With Venezuelan crude now selectively returning at multi-year highs and Russian crude discounts narrowing, the brokerage firm sees structural headroom for Jamnagar’s margin spread to re-widen. Analysts model a sustainable structural premium of USD 3.0/bbl over domestic PSUs. Higher Venezuelan crude intake combined with full complex optimization offers further upside to O2C Ebitda and free cash flow generation.

 

Crucially, this margin resilience is reinforced by Jamnagar’s captive petcoke gasification complex, which replaces expensive imported merchant LNG with low-cost syngas for plant utilities and hydrogen generation. Furthermore, while peer refiners face operational yield drag when processing high-TAN, extra-heavy grades, Jamnagar’s zero-black-oil configuration converts these barrels directly into high-margin middle distillates.

 

YES Securities has maintained a 'Buy' rating on Reliance Industries with a target price of ₹1,660 per share.

 

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.