Reliance shares jump 15 percent in November after strong quarterly earnings

Reliance Industries shares have risen 15 percent in November so far, closing at 1,339 rupees on Friday after strong second-quarter results. The stock has ended every trading session in the green since October 30. On November 2, the shares surged 11.60 percent for their biggest single-day gain in five years, adding 1.82 lakh crore rupees to the market cap in one session.

Market Gains

The latest gains have added 2,37,767 crore rupees to Reliance Industries in November, taking its total market value to 18,12,954 crore rupees. At its record high, the company reached a market value of 21.8 lakh crore rupees after becoming the first Indian firm to cross the 21 lakh crore mark in June 2024. The recent rally also helped the Nifty 50 recover because of the company's heavy weightage in the index. Meanwhile, its telecom unit Jio Platforms debuted last week with shares listing at 1,440 rupees, marking a 21.3 percent premium over the issue price.

Shareholder Growth

Reliance saw its retail shareholder base expand around the time of the Jio Platforms IPO. The company added 204,923 retail shareholders in the March quarter, 219,986 in the June quarter, and 401,762 in the September quarter. Its retail shareholder base reached 4.87 million, a sequential increase of about 9 percent, while retail ownership edged up to 7.24 percent. Also, 3,454 retail investors holding shares worth more than 2 lakh rupees each collectively held a 1.43 percent stake at the end of September.

Financial Results

Reliance reported a record consolidated profit after tax of 29,550 crore rupees for the July-September quarter, up 33.8 percent from 22,092 crore rupees a year ago. Revenue rose 27.8 percent year-on-year to 3,62,268 crore rupees, and EBITDA increased 23.9 percent to 62,409 crore rupees. The oil-to-chemicals business drove the performance, with its EBITDA surging 67.9 percent to 25,203 crore rupees due to higher global fuel margins and supply disruptions in West Asia. Digital services also grew, though Reliance Retail Ventures saw profit decline 24.3 percent to 2,611 crore rupees despite a 6.4 percent revenue increase to 91,716 crore rupees.

Context

Large stock market indices like the Nifty 50 often move closely with heavyweight companies because of how index weightages are calculated. Strong corporate earnings reports frequently change investor sentiment and drive renewed buying interest after periods where stocks remain overlooked.