Reliance Industries (RIL) is expected to post lower YoY growth in earnings before interest taxes, depreciation and amortisation (EBITDA) in Q3FY26 at 7-9% as compared to Q2 where it posted a YoY growth of 15%. The lower growth is attributed due to lower growth expected in Reliance Retail .
While O2C and Jio is expected to post double digit YoY growth in EBITDA in Q3 , growth at Reliance Retail is expected to moderate due to high base and shifting of festival season.
Goldman Sachs expects Q3FY26 EBITDA for O2C (oil to chemical) to grow 16% YOY and 11% QoQ as it believes stronger refining earnings more than offset decline in petchem earnings.
What do brokerages say?
“Cost curve positioning for Asian refiners (which rely more on heavier crude) improved sequentially with easing of both Dubai-Brent premium and Saudi crude premiums, helping to sustain strong refining margins despite lower Russian crude exposure (33% of import mix in 3Q vs. 52% in 2Q as per Kpler),” the global brokerage said.
It’ expects strong refining margins to sustain in Q4 as the refining market remains “structurally tight “due to limited net capacity additions, while lower Saudi OSPs offset potential further reduction in Russian crude exposure, it said
Though it expects petchem earnings to decline sequentially driven by weaker olefins spreads following lower oil prices, however it said the decline in petchem earnings to be limited due to potentially higher US ethane gas procurement.
It expects Q3FY26 revenues of Rs32900 crore , up 3% QoQ or 12% YoY for Jio Infocomm; excluding fixed/enterprise revenues. It expects subscriber additions to remain strong at 9.5 million (vs. 8.3 million in Q2), driven by healthy adds across both wireless and fixed broadband subscribers.
It expects a moderation in sales growth for Reliance Retail, which is in line with trends seen in retail/ consumer discretionary demand in 3QFY26. It has lowered sales growth expectation to ~10% YoY in Q3FY26 from ~12% YoY earlier. The growth was 21.3% YoY in Q2FY26. It expects ~6% YoY growth in EBITDA.
Morgan Stanley’s prediction
Morgan Stanley said Q3 should see improved O2C earnings, supported by strong refining margins of above $12/bbl – something it believes can sustain above mid-cycle levels after the last two years of relative under-performance versus peers.
“Globally, under investment in new refining capacity combined with disruptions in existing infrastructure have formed underlying tailwinds to O2C margins. We see 5-7% upside risk to RIL’s FY27-FY28 earnings as new fuel refining capacity adds lag the 0.7-0.9mbpd annual global consumption growth by more than half, “the brokerage said.
It expects ~7 million net addition of subscribers QoQ with a modest increase in ARPU largely driven by better subscriber mix.
Kotak Institutional Equities expect ~9.3 %YoY EBITDA growth, driven by O2C and telecom segments. It expects EBITDA of O2C and digital go up 15%/17% and 4.5% for retail, and decline of 15% for E&P.
“We estimate O2C’s EBITDA to rise 10% QoQ (15% YoY) on better refining and weaker rupee, partly offset by weak petchem. We expect R-Jio’s EBITDA to rise 15% YoY (up 3% yoY), with blended ARPU of Rs214 (up 1.3% qoq). ” it said.
For Reliance Retail , it assumes revenue growth to moderate to ~9.6% YoY (18% YoY in Q2) on festive season split and RCPL’s demerger. We expect RRL’s EBITDA to rise ~6% yoy/qoq.
Axis Capital estimates the company’s Q3FY26 consolidated revenue to be ~Rs2,58800 crore with a flattish growth on a QoQ basis and up 6% YoY and EBITDA to be Rs46700 crore, up 2% QoQ; and up 7% YoY.
It expects Reliance Retail’s growth to decelerate on higher base, festive shift, GST rationalization and demerger of Reliance Consumer Products Limited (RCPL).
“Jio should see a steady quarter from healthy subscriber addition, ARPU uptick and growing FWA traction. O2C EBITDA should rise on better refining margin partially offset by weaker petchem,” it said.
It said O2C EBITDA should rise 8% QoQ to Rs16200 crore, supported by better refining performance partially offset by a weaker petchem margin (due to weaker spreads and higher ethane price).
“GRM is estimated to be higher by ~30% QoQ/ YoY helped by higher cracks for diesel (19% QoQ), petrol (45% QoQ) and jet fuel (40% QoQ). O2C throughput is expected to rise 3% YoY to 20.4 million tonnes(-2% QoQ).
O&G EBITDA, however, is expected to be down 4% QoQ to Rs4800 crore on lower crude price (down 7% QoQ) and marginal decline in production, it said.