RIL Share Price Drops 2.5% After Posting ₹26,994 Cr Profit in Q1 FY26

The Reliance share price fell more than 2.5% on Monday, July 21, 2025, even after the company reported record profits. The stock of India's most valuable company dropped to ₹1,438 per share, making it the biggest loser in the Nifty 50 index.

What Happened to Reliance Share Price?

The drop in the RIL share price occurred after Reliance Industries announced its Q1 FY26 results on July 18. The company reported massive profits but investors were not satisfied with certain aspects of the business. 

The current market data shows that Reliance target price is ₹1578.46, which is a slight upside of 6.94% compared to the current price of ₹1476. Based on analysts, RELIANCE was correctly assessed at a price target of 1,585.47 INR with a maximum estimate of 1,850.00 INR and a minimum estimate.

Reliance Industries Q1 Results: The Big Numbers

Reliance Industries Q1 results showed impressive growth in profits:

Record Profit : Reliance made ₹26,994 crore profit in Q1 FY26, which is 78% higher than last year's ₹15,138 crore. This happened mainly because the company sold its shares in Asian Paints, earning ₹8,924 crore from this sale.

Revenue Growth : The company's total revenue grew 5% to ₹2,48,660 crore compared to ₹2,36,217 crore last year.

Operating Performance : The company's EBITDA (earnings before interest, taxes, depreciation, and amortisation) grew 11% to ₹42,905 crore, with profit margins improving to 17.25%.

Breaking Down Each Business

Jio (Telecom Business) - The Star Performer

Jio, Reliance's telecom arm, had a strong quarter in Q1 FY26. The company reported net profit of ₹7,110 crore, a year-on-year increase of 25%. Revenue is also strong and increased 19% to ₹41,054 crore. The company reported strong gains in average revenue per user (ARPU), increasing 15% to ₹208.8 per month, further demonstrating that customers are willing to customers are spending more on Jio services.

Reliance Retail - Steady but Slow

The retail business reported decent growth but just below consensus expectations. Net profit increased 28% to ₹3,271 crore and Revenue grew at 11% to ₹84,171 crore. The company opened 388 stores during the quarter which increased the total store count to 19,592 stores in India. The registered customer base of Reliance Retail grew to 358 million customers.

Oil & Chemicals Business - The Weak Spot

The Oil and Chemicals business has been a traditional business for Reliance. In this quarter, the company reported a drop in revenue of 1.5% year on year, and overall performance was weaker than expected. In addition, with the new European bans on Russian oil, it has created uncertainty around the company's future operations and the overall prospects for profitability.

Why Did Reliance Share Price Fall?

Despite good Reliance Q1 results, the share price dropped for several reasons:

One-Time Gains : A significant amount of the increase in profit came from sales of Asian Paints' shares and not from its activities as a business. Notably, if the one-time increase in profits from the sale of Asian Paints was removed, profit increased only 14.4% year-over-year, which is less than the level analysts were expecting. 

Retail Business : The retail segment overall grew revenue at only 11%, which was short of the market's expectations. Analysts expected a stronger outcome from this key business segment. 

Oil Business : The oil-to-chemicals business saw reduced revenues after declining profitability and new sanctions on Russian oil purchased. 

High Expectations : Understandably, investors expected better overall performance from each and every business segment.

What Analysts Say About Reliance Share Price Target 2025

Leading investment firms shared their views on Reliance share price target 2025:

Positive Outlook:

• Nuvama: Maintains 'Buy' rating with target price of ₹1,767

• Nomura: 'Buy' rating with target price of ₹1,600

• Macquarie: Sees good potential in Jio business

Key Strengths Highlighted:

• New Energy business expected to grow strongly

• Jio's pricing power and subscriber growth

• Strong balance sheet and cash position

Areas of Concern:

• Retail business growth slower than expected

• Oil refining margins under pressure

• Impact of Russian oil sanctions unclear

Future Outlook: What's Next for RIL Share Price?

Short-term (2025): Reliance share price target for 2025 is between ₹1,072.15 and ₹1,842.14, showing wide analyst opinion ranges.

Medium-term Growth Drivers:

• New Energy Business: Expected to contribute over 50% of profits in 4-6 quarters

• Jio Growth: Potential IPO listing and tariff increases

• Retail Expansion: Continued store network growth

Long-term Vision: Management aims to double company earnings by 2029, supported by:

• Clean energy transition

• 5G network expansion

• Retail market leadership

Key Takeaways for Investors

Why Reliance Share Price Fall Happened:

1. Profit growth was mainly due to one-time asset sales

2. Core business performance was mixed

3. Retail growth disappointed investors

4. Oil business faces regulatory challenges

Reasons to Stay Optimistic:

1. Strong Jio business momentum

2. New Energy business potential

3. Solid financial position

4. Long-term growth strategy

Investment Considerations:

1. Stock has fallen 6% from recent highs, creating potential buying opportunity

2. Reliance Industries Ltd is up for a third straight session in a row showing some recovery

3. Analysts maintain mostly positive ratings despite short-term concerns

Conclusion

Despite the decline in Reliance share price following its Q1 results, the company’s long-term outlook remains positive. The dip instead reflects investor concerns about variability in business performance rather than any fundamental weakness.

With the New Energy segment ramping up and Jio continuing its robust growth across various digital segments, several analysts have argued that the current RIL share price provides investors with a good opportunity to gain exposure for long-term value. Nonetheless, investors need to monitor developments in the retail business recovery and challenges related to the oil segment in future quarters.

The Reliance Industries Q1 results indicate that while the company is transitioning towards areas for future growth, it needs to improve on its traditional businesses to justify any premium valuations.

Disclaimer : This analysis is prepared for educational purposes only and should not be considered as financial advice. Investors should consult their financial advisors and conduct thorough research before making investment decisions. Investments in equity markets are subject to market risks, including volatility and sector-specific challenges.

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