4 reasons why Reliance Industries shares can rally after Monday magic sparked historic 12% surge

The stock's biggest single-day gain since April 2020 added nearly Rs 2 lakh crore to Reliance Industries' market capitalisation in a single session.This came after the oil-to-chemicals conglomerate reported a 41% year-on-year (YoY) rise in consolidated net profit to Rs 25,548 crore in the July-September quarter of FY27, compared with Rs 18,165 crore in the year-ago period. Its revenue from operations, meanwhile, increased 29% YoY to Rs 3.32 lakh crore during the quarter under review, up from Rs 2.58 lakh crore in the corresponding quarter of the previous financial year.Live Events1) Volume breakout hints at trend reversalReliance Industries' 12% rally was accompanied by an extraordinary volume breakout, Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities pointed out.

Explaining the technical charts, the analyst noted that the stock has decisively broken above a prolonged downward sloping trendline, suggesting that selling pressure may finally be giving way to fresh buying interest.“What makes this signal particularly interesting is the historical evidence. Our analysis identifies nine unique previous instances since 2000 when Reliance gained over 5% in a session with volumes exceeding three times the previous five day average volumes.

All nine instances delivered positive one year forward returns, with average gains of 55.32%,” he said.However, when RIL’s performance is compared with Nifty 500 Returns, the signal delivers an outperformance in only seven out of nine instances. It generates an average alpha of 44.12% over Nifty 500, the analyst explains.2) Delivery based buying and short coveringA massive 12% surge in a mega cap stock in one day is indeed very rare, said V K Vijayakumar, Chief Investment Strategist at Geojit Investments.

He noted that a huge delivery based buying of around Rs 6,413 crore triggered massive short covering in the stock. Delivery based buying refers to purchasing shares to hold them for extended periods in one's demat account, in comparison to intraday delivery."Massive value buying along with big short covering leads to such sharp surges in stocks, even in megacaps. The takeaway from this experience is that patient value buying will be rewarded,” the analyst said, adding that it is possible that there are short positions in many quality large-caps.

“These are short-positions created by bears on expectations of continued FII selling. The circumstances are changing,” he further said.3) Strong Q2 earningsInternational brokerages including Jefferies, Nomura and others maintained their ‘Buy’ ratings on the shares of Reliance Industries following the earnings print. Jefferies has a target price of Rs 1,710 apiece, implying an upside potential of 47% from last week’s levels.

It raised the company’s FY27 and FY28 EBITDA estimates by 6% and 2%, respectively, and sees earnings upgrades and a recovery in retail growth to the mid-teens as possible catalysts for a re-rating of the stock.Nomura reduced its target price for Reliance Industries shares to Rs 1,560 apiece, which still implies a strong upside potential of 34% from last week. The international brokerage noted RIL’s consolidated EBITDA came in 9% above its estimate, largely driven by stronger-than-expected performance in the oil-to-chemicals (O2C) segment, while the upstream and telecom businesses performed in line with expectations, although the retail segment missed estimates.4) Jio Platforms listing unlocks valueThe current volume breakout in Reliance Industries’ shares comes at an interesting juncture, with several fundamental triggers potentially improving the investment narrative.

Apurva Sheth from SAMCO Securities said that the biggest catalyst is the successful Jio Platforms IPO and its listing last week, which unlocked value through a separate market valuation of Reliance’s digital business, along with strong earnings.“The confluence of a technical breakout, exceptional volumes, improving earnings and value unlocking through Jio makes Reliance an interesting stock to watch,” the technical analyst from SAMCO Securities said.Reliance Industries share priceReliance Industries shares were trading almost flat on Tuesday, swinging between minor gains and losses as the historic 12% rally may have led to some profit booking on the heavyweight stock.

The shares were trading at around Rs 1,295 apiece on NSE.The shares of the company have gained around 9% in one week and more than 11% in a month. The stock is however down over 17% in 2026 so far and 12% in one year. In the longer term, the shares of the company have delivered positive returns of more than 12% in three years and nearly 5% in five years. The company has a market capitalisation of nearly Rs 17.5 lakh crore.

Mukesh Ambani gets $8.5 billion richer in a day as RIL shares soarDisclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication.

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