Reliance Industries Share Price Crashes 3.5%, Over Rs 69,000 Cr M-Cap Lost; Why Is RIL Stock Falling? BUY?

Reliance Industries share price crashed by more than 3.5% on BSE, with over Rs 69,000 crore erosion in market valuation on January 19. The reason behind investors intense bearish sentiment for RIL is its weak Q3 results due to slowdown in retail business. However, the latest decline brings buy-on-dips opportunity in RIL because analysts are still bullish due to strong outlook ahead.

Reliance Industries Share Price:

At the time of writing, RIL share price traded at Rs 1408.95 apiece on BSE, down by 3.34% with market cap of Rs 19,06,657.73 crore.

In the early deals, the stock dropped by over 3.5% to hit an intraday low of Rs 1406.50 apiece. The stock is currently near its day's low. At the intraday low, RIL lost at least Rs 69,037.26 crore of market cap from the previous session's total market capitalisation of Rs 19,72,493.21 crore.

Why Reliance Industries Share Price Is Falling?

Although, Reliance's earnings was largely in-line with estimates, the underperformance in Reliance Retail came as an eyesore for investors.

According to analysts at Emkay Global, RIL's Q3FY26 consol EBITDA of Rs460 billion, flat QoQ, was a 4% miss with Retail being the dampener. Segmental total EBITDA was largely in line due to the loading of non-operating income (other income of Rs49 billion was a 36% beat). APAT (after MI) of Rs186.5 billion was also in line. O2C EBITDA rose 10% QoQ to Rs165 billion on strong refining, partly offset by weak chemicals. Jio EBITDA was up 2% QoQ on healthy net subscriber addition of 8.9mn (Emkay: 5.5mn). Retail revenue grew 8% YoY but had a one-month impact of consumer business demerger (10-11% growth otherwise), while EBITDA was up just 1% at Rs69.2 billion, as the labor code impact docked a few percentage points. Reported net debt fell 1% QoQ to Rs1.17 trillion, while Q3 capex was Rs338 billion.

But Emkay's analysts also highlighted that Reliance's management stated integrated solar manufacturing including wafer-ingot, glass, and polysilicon should commission in next few quarters, while battery ecosystem development (incl cell production) is underway. RE generation target is upped to 300 BU with green chemicals included.

Additionally, analysts at Systematix Institutional Equities said, RIL is expected to commission its fully integrated 10 GWp annual solar giga factory by end of FY26 (commissioned solar module in early FY26) and can further scale upto 20 GWp p.a. Also expect, Jio's IPO to be a key trigger for RIL in early FY27. Total capex declined 15% QoQ while net debt remained flattish at Rs1.3 trillion.

During Q3FY26, Reliance posted a consolidated net profit of Rs 18,645 crore, which is attributable to its owners. The latest PAT surged mildly by 0.6% year-on-year and up by 2.64% quarter-on-quarter.

On the top-line front, the behemoth bagged revenue from operations of Rs 2,93,829 crore in the quarter under review. This is higher by 9.97% from revenue of Rs 2,67,186 crore in Q3FY26 and up by 3.63% from Rs 2,83,548 crore in Q2FY26.

However, Reliance's EBITDA margins contracted to 17.4% in Q3FY26 compared to 18% in Q2FY26 and 18.3% in Q3FY25. Although, the operating profit stood at Rs 46,018 crore in Q3FY26, higher from Rs 45,885 crore in Q2FY26 and Rs 43,789 crore in Q3FY25.

Should You Buy Reliance Industries Share Price?

Data from Elara Capital revealed that Reliance stock rose 3% in the past three months, outperforming the benchmark Nifty index (flat QoQ), led by strong fuel cracks. This was due to the impact of US/EU sanctions on Russia, lower Chinese exports and refinery outages globally.

After Q3, analysts at Elara said, " We cut FY26E/27E/28E EPS by 11%/8%/7% on lower Retail EBITDA, higher interest and tax expenses. We raise our TP to INR 1,717 (from INR 1,636), as we roll over to FY28E. We assume FY28E EV/EBITDA for digital services at 14.0x (from 15.0x) and GRM at USD 12.0/bbl (from USD 9.8/bbl). We ascribe 22.0x (from 24.0x) FY28E EV/EBITDA to retail, and 6.0x (from 6.5x) to O2C. Maintain Accumulate, on expectation of strong growth in telecom EBITDA, recovery in Retail, though partially offset by normalizing GRM and falling E&P revenue. Telecom, retail IPO plans, and closure of refining/petchem capacity globally are triggers."

Further, Emkay's analysts added, "We value RIL on an SOTP basis, valuing core segments using Dec-27E EV/EBITDA and New Energy/Other segments using EV-IC/EV-EBITDA methodologies. Our blended retail EV/EBITDA multiple falls slightly to 27x from 28x, reflecting the EBITDA mix of non-core business. Key risks: Adverse commodity/currency movement, competition, delay in monetization of ventures, and policy risks."

Brokerage Systematix has kept EPS estimates largely unchanged for FY26E/FY27E and introduce FY28E as we forecast a 7.6%/9.2% CAGR in EBITDA/PAT over FY25-FY28E backed by strong diversified businesses. It said, "We roll forward our estimates to FY28E and raise our SoTP based target price to Rs1,700 and maintain BUY."

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