Retail restocks Reliance Industries' growth shelf, boosting performance

Broad-based consumer demand reloads growth prospects and puts the stock back in analysts' baskets

A recovery in the retail segment helped Reliance Industries (RIL), the country’s largest listed company by market value, beat brokerage expectations for the July–September quarter (Q2) of 2025–26 (FY26). After two weak quarters, retail’s turnaround lifted the group’s overall performance. 

The digital arm also outpaced expectations with steady sequential gains, while the oil-to-chemical (O2C) business came broadly in line with Street estimates. With the Q2 beat, expectations of stronger earnings ahead, and valuations that still look reasonable, most brokerages remain upbeat on the stock. 

Retail was the main story of Q2. 

Gross revenue crossed ₹90,000 crore, up more than 18 per cent year-on-year (Y-o-Y) and nearly 7 per cent sequentially. Grocery and fashion and lifestyle drove growth, rising 23 per cent and 22 per cent, respectively, helped by festival spending. 

Consumer electronics revenue grew 18 per cent Y-o-Y, aided by a lower goods and services tax and new product launches. The retail operating margin slipped slightly — by 10 basis points Y-o-Y — to 8.4 per cent. 

In retail delivery, Morgan Stanley said JioMart and quick commerce (qcom) are expanding fast. JioMart added 5.8 million new customers in the second half of FY26 — more than doubling from the previous quarter — while qcom services are now offered for electronics as well. The 42 per cent sequential rise in qcom volumes came as a positive surprise and may explain the small drop in operating margin, according to analysts Mayank Maheshwari and Gaurav Rateria.

 

Macquarie Capital said retail growth was broad-based across verticals. Analysts Aditya Suresh and Baiju Joshi observed that margins held steady even as JioMart’s customer count more than doubled quarter-on-quarter. They added that hyperlocal commerce is scaling up fast, with daily orders tripling from a year earlier.

 

The digital (telecommunications) business, too, showed healthy progress, with operating profit rising 3.1 per cent sequentially. Subscriber additions were strong at 8.3 million, while average revenue per user held steady at ₹211.4, supported by customer upgrades and an extra day in the quarter.

 

JioAirFiber continued to expand, reaching 9.5 million connections at the end of Q2FY26, up from 7.4 million in the first quarter. Total home connections now stand at 23 million, and the company aims to reach its target of 100 million home subscribers.

 

Operating profit in the O2C business rose 21 per cent Y-o-Y, roughly matching forecasts. This implies a gross refining margin of $9.5–10 per barrel. The company said the annual improvement came from a sharp recovery in fuel cracks and better polymer deltas. Sequentially, stronger fuel cracks were partly offset by costlier West Asian crude and weaker downstream margins.

 

Macquarie, which maintains an ‘outperform’ rating, said Q2 signals an earnings turnaround led by the retail, Jio, O2C, and JioStar segments. After a pause in group earnings growth, this result supports the consensus projection of roughly 15 per cent annual growth from 2024–25 through 2027–28.

 

Morgan Stanley believes a rerating is likely as consumer retail regains ground and exceeds expectations. With confident management guidance, the setup for the third quarter (October–December) looks promising, especially for retail and refining. It added that new energy and artificial intelligence could drive the next $50 billion in value creation. The brokerage has an ‘overweight’ rating on the stock.

 

JM Financial Services also maintains a ‘buy’ call. Analyst Dayanand Mittal said the valuation looks appealing after the recent share-price weakness. He expects RIL’s net debt to fall gradually as capital spending eases and internal cash generation strengthens.