Shares of Reliance opened slightly lower after the company reported its second-quarter results on Monday, beating net profit estimates but missing revenue expectations.

What Happened: The Mukesh Ambani-owned conglomerate posted a consolidated net profit of ₹16,563 crore for the September quarter, marking a 4.8% decline from ₹17,394 crore in the same period last year. Revenue from operations for the quarter stood at ₹2.31 lakh crore, reflecting a slight increase of 0.2% compared with ₹2.31 lakh crore a year ago.

Analysts had projected that the oil-to-telecom giant’s revenue would reach ₹2.34 lakh crore, with a net profit of around ₹15,230 crore.

Brokerages’ Comments: CLSA said the Q2 EBITDA, which stood at ₹39,058 crore, fell 2% short of forecasts due to underperformance in the oil-to-chemicals and Reliance Retail segments.

In contrast, Reliance Jio and the upstream sector performed better. Additionally, lower depreciation and higher other income led to a 7% increase in consolidated profit.

The brokerage noted that a potential increase in AirFiber subscribers, the launch of new energy projects, and the possible IPO of Jio could serve as positive catalysts in the next 12 to 15 months. CLSA had an “outperform” rating on the stock with a target price of ₹3,300.

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UBS had a “buy” recommendation on the stock with a target price of ₹3,250. The digital segment’s performance met expectations, but Retail fell short, and the oil-to-chemicals business continued to be a drag, the brokerage said.

A telecom tariff increase resulted in subscriber losses, and the expansion of retail infrastructure has slowed, the brokerage noted. It reduced FY25-27 EBITDA estimates by 5%-10%.

Jefferies has also lowered its estimates by 8% and 6%, respectively. It had a”buy” call on the stock with a target price of ₹3,400.

Nomura maintained a “buy” recommendation with a target price of ₹3,450. Reported net debt decreased to ₹1.12 trillion, while capital expenditures rose to ₹288 billion, the brokerage noted. It reduced FY25-FY27 EBITDA forecasts by 5% to 6%, respectively. The launch of new energy operations by March 2025 is expected to be a key trigger in the coming months, Nomura added.

Bernstein had an “outperform” rating with a target price of ₹3,440. In the second quarter of FY25, earnings missed expectations, though average revenue per user (ARPU) was better than anticipated, the research firm said.

The Retail segment showed softness, and oil-to-chemicals margins were weak, it noted. Despite the earnings miss, Bernstein views the company’s valuations as supportive. Citi had a “neutral” call on the stock with a target price of ₹2,990. The second quarter was marked by continued weakness in oil-to-chemicals and retail segments but Jio was on expected lines, it added.

JPMorgan has an “overweight” call with a target price of ₹3,125. In the second quarter, net profit was in line with its expectations, driven by better performance from Jio in terms of higher ARPU.

The oil-to-chemicals segment showed significant weakness, with EBITDA down 26% over the past two quarters, and retail experienced its weakest revenue growth since 2014, excluding the COVID period, the brokerage said.

JPMorgan added that telecom is expected to continue growing, while the current challenges in refining, petrochemicals and retail are likely to improve.

Price Action: Reliance’s shares were down 0.23% to ₹2,738.80 on Tuesday morning.

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