Reliance Industries Surges on Strong Quarterly Profit, Retail Recovery

Reliance Industries shares rose nearly 5% on Friday, marking their best week in six months after the company exceeded quarterly profit estimates, driven by a rebound in its retail business. India's most valuable company, and a key Nifty 50 index (.NSEI) constituent, saw its stock climb 2.2% on the day and 3.4% this week, even as the Nifty index dropped 0.9%, ending the week down 1.4%.

Morgan Stanley highlighted that Reliance is "back on a growth path" after a challenging six months, with risks of earnings downgrades easing. The Mukesh Ambani-led conglomerate reported a robust third-quarter profit on Thursday, fueled by festive demand in retail and strong telecom growth from 5G adoption and tariff hikes.

Following the results, at least six brokerages maintained their "buy" ratings on Reliance, while four raised price targets, according to LSEG data. Analysts at J.P. Morgan suggested the retail unit’s improved performance could reverse recent stock declines. Reliance shares had dropped 6% in 2024, the first annual decline in a decade, due to concerns over refining margins and retail segment growth.

Citi analysts noted the strong third-quarter results, particularly in retail, which had weighed on stock performance and investor sentiment earlier. They expressed optimism that the positive momentum in retail would drive a reversal of these trends.

Reliance’s performance underscores its resilience, with its diversified business segments poised to capitalize on India’s economic recovery. Investors now anticipate sustained growth in retail and telecom, reinforcing the company's position as a market leader.