RIL Q1 FY26 Results: Analysts Remain Bullish on New Energy Despite Soft Start

Q1 FY26 Snapshot: Mixed Performance with Strategic Optimism

• EBITDA (Q1 FY26): ₹42,900 crore, up 11% YoY

• Retail growth: 13% YoY

• O2C growth: 11% YoY

• Net profit supported by Asian Paints stake sale

• Capex remained low, while net debt rose sequentially

• Analysts termed the quarter a “soft start” to FY26

According to analysts tracking the oil-to-telecom major, gains from the Asian Paints stake sale and relatively muted capex still led to an increase in net debt due to repayments related to earlier capital expenses.

New Energy (NE): The Next Big Growth Engine

Reliance Industries’ future growth bets are clearly aligned with its ambitious New Energy ecosystem, which the management expects to become fully operational in the next 4–6 quarters.

Nomura India remarked:
“We believe the New Energy business could be the next growth driver for RIL. The company is targeting world-leading scale in integrated solar and battery manufacturing. Captive green energy use may cut group energy costs by 25%.”

Key Highlights from Analyst Reports

Nomura India

• Target Price: ₹1,600

• Expects significant energy cost savings via captive green energy use

• Strong outlook for solar, ESS, and hydrogen implementation

Emkay Global

• Revised EPS (FY26/27): Up 4–7%

• Revised TP: ₹1,600 (+10%)

• Factors in tariff hikes in Jio and improved GRMs in O2C

• Retains BUY but advises better entry points

Motilal Oswal Financial Services (MOFSL)

• Revised TP: ₹1,700 (earlier ₹1,685)

• Cuts FY26–27 EBITDA by 1–2% and PAT by 4%

• Maintains BUY, forecasting 11% CAGR in EBITDA/PAT from FY25–28

Jefferies

• Target Price: ₹1,726

• Positive on refining margins backed by closures in US/EU refineries

• Sees structural support from fuel crack spreads during US driving season and seasonal air travel

Nuvama Institutional Equities

• Target Price: ₹1,767

• Q1 EBITDA below estimates due to weak retail and O2C

• Expects fully integrated 10 GW polysilicon-to-module facility by FY26-end

• Hydrogen (GH2) production expected to start before PLI deadline in FY27

• NE platform expected to be self-funded, backed by next-gen technologies like perovskite

O2C and Refining: Near-Term Tailwinds Expected

Reliance expects its core O2C business to benefit from:

• Tightening global fuel inventories

• Seasonal demand (US driving, air travel)

• Refining capacity closures in Europe and North America (CY25–26)

These factors are likely to support auto fuel and jet fuel crack spreads, resulting in stronger GRMs (Gross Refining Margins) in upcoming quarters.

Digital & Telecom: Jio Outlook Positive

With a possible tariff hike expected in Q3 FY26, Jio is projected to strengthen its revenue base further. Analysts have baked this into revised forecasts, raising earnings expectations for the telecom segment.

Conclusion: A Soft Start with Strong Structural Tailwinds

Despite a somewhat underwhelming start to FY26, Reliance Industries continues to enjoy investor confidence due to its diversified portfolio and bold future-focused investments in New Energy. The upcoming quarters, particularly in FY26–27, will be crucial in unlocking value from its solar, battery, and hydrogen projects.

As the company accelerates partnerships, production, and tech innovations across the energy value chain, RIL appears well-positioned to lead India’s green industrial revolution—backed by scale, capital, and credibility.

RIL remains a long-term BUY across major brokerage houses, with target prices ranging between ₹1,600 and ₹1,767, underlining belief in the company’s transition from a traditional energy giant to a sustainable, tech-forward conglomerate.