India’s largest private-sector conglomerate, Reliance Industries, recently reported a record-breaking quarterly profit in Q1 FY26, but that hasn’t prevented its stock from witnessing a steep decline. Alongside the fall in stock price, Reliance Chairman Mukesh Ambani also slipped in Bloomberg’s Billionaires Index, raising questions about market sentiment and future prospects of the company’s diversified businesses.
On July 23, Reliance shares trading at ₹1,421 on the Bombay Stock Exchange. This sudden fall wiped out $3.28 billion from Mukesh Ambani's net worth, due ro recent fall pushing him down from the 16th to the 17th position on the Bloomberg Billionaire Index. Moreover, he dropped out of the Top 10 list of the highest earners in 2025, sliding from 9th to 13th position. His total earnings this year now stand at $12.9 billion, with a current net worth of $104 billion.
The Paradox of Profit and Market Reaction
This drop in market valuation comes as a surprise, considering Reliance Industries posted a massive profit of ₹30,783 crore in Q1 FY26 — the highest in the company’s history. However, according to multiple brokerage firms, a significant part of this profit is non-recurring. About ₹8,924 crore was attributed to the sale of its stake in Asian Paints, and the quarter also benefited from lower-than-expected taxes and interest expenses.
Weakness in Core Business
While the headline profit was strong, brokerage houses like Jefferies, Motilal Oswal, and MK Global pointed out that Reliance’s core businesses — retail and O2C (Oil-to-Chemicals) — underperformed relative to expectations. Even the company’s EBITDA fell short of analyst estimates, triggering disappointment among investors and contributing to the stock’s decline.
Focus Shifts to Upcoming AGM
With the Q1 earnings season behind, market participants are now keenly awaiting Reliance’s upcoming Annual General Meeting (AGM). Analysts expect Mukesh Ambani to make major announcements around its FMCG, new energy, media, retail, and Jio IPO plans. These are seen as long-term growth triggers that could reshape the company’s valuation narrative.
Gigafactory in Gujarat: A Strategic Game-Changer?
One of the most anticipated projects in Reliance’s future pipeline is its gigacomplex in Kutch, Gujarat. As per a Bernstein report, this facility is expected to be four times larger than Tesla’s gigafactory and is poised to become the backbone of Reliance’s energy business.
Another brokerage, Nomura, believes that if the company’s solar module business is valued at 15x EV/EBITDA, it could be worth $20 billion. This could serve as a catalyst for the stock, much like the impact Jio’s launch had in previous years.
Broader Structural Shifts and Valuation Insights
According to JP Morgan, Reliance’s business model is undergoing a transformation, with 54% of EBITDA now contributed by retail and telecom segments. They estimate retail alone to be worth $121 billion, suggesting it is undervalued compared to peers like DMart. Any stake sale or IPO could unlock significant shareholder value.
Brokerages like CLSA and Nomura continue to maintain a “Buy” rating on Reliance. CLSA is optimistic about the continued growth of Jio and retail, while Nomura projects that by FY27, the stock will trade at 12.1x EV/EBITDA and 23.3x PE, signaling attractive long-term valuations.
Investment Outlook: Short-Term Caution, Long-Term Optimism
In summary, while Reliance’s stock has recently faced volatility due to a mix of temporary profit factors and underwhelming core business performance, the long-term growth story remains intact. Experts believe that the company’s diversified investments in renewable energy, telecom, and consumer retail, along with potential IPOs, could drive future value creation.
All eyes are now on the upcoming AGM, where Mukesh Ambani is expected to unveil the company’s next big strategic steps. Until then, analysts and investors alike will be watching closely to see whether this dip is merely a buying opportunity in disguise.
Disclaimer: This article is for informational purposes only. Please consult a qualified financial advisor before making any investment decisions.
