DFC cut its ratings on Reliance Industries to 'neutral' from 'outperform', citing valuation concerns after a recent rally in shares of the energy conglomerate.

The brokerage said Reliance's current share prices are already factoring in "healthy" gross refining margins, better petrochemicals spreads and a rise in exploration and production volumes.

Reliance on Friday posted its first profit increase after four quarters of declining returns, buoyed by improving margins in its core oil refining business.

Reliance shares were up 3.5 percent at 932.3 rupees as of 10:49 a.m.