Reliance Industries (RIL) on Friday missed analyst estimates for the July-September quarter as softness in its oil and gas and petrochemical segments tempered gains in refining, retail, and digital services. The company reported a net profit of Rs 18,165 crore during the quarter, up 10% from Rs 16,563 crore a year earlier, but below the Bloomberg consensus estimate of Rs 20,023 crore. Sequentially, profits declined 33%.
Revenue for the quarter rose 10% year-on-year to Rs 2.59 lakh crore, ahead of Street expectations of Rs 2.49 lakh crore, but slipped 4% sequentially as energy markets remained volatile and downstream chemicals continued to drag. Total costs increased 8.8% to Rs 2.34 lakh crore, compressing margins despite a steady operational performance. Consolidated Ebitda grew 17.5% year-on-year to Rs 45,885 crore, translating to a margin expansion of over 100 basis points to 17.7%, underscoring steady execution in core businesses.
Mukesh Ambani, chairman and managing director, described the quarter as “robust,” driven by strong contributions from oil-to-chemicals (O2C), Jio, and retail. “Reliance delivered a resilient performance led by our domestic-focused portfolio and the structural growth in the Indian economy,” Ambani said in a statement. He added that Jio continued to see positive momentum in subscriber additions across home and mobility services, while the retail arm benefited from higher volumes across formats and the growing adoption of its hyperlocal delivery model.
The O2C segment’s gains were blunted by a persistent glut in downstream chemicals and a sharp fall in polyester chain margins, which declined 9% year-on-year to $432 per metric tonne. Analysts attributed this to continued global overcapacity, particularly in China, and subdued textile demand due to tariff concerns. Ambani acknowledged the challenge, noting that “corrective steps by industry stakeholders will help balance global downstream markets in the medium term”. Still, O2C Ebitda rose 20.9% year-on-year, helped by higher fuel margins and stronger domestic retailing volumes.
The oil and gas segment remained the weakest link. Segment revenue fell 2.6% year-on-year, and Ebitda declined 5.4%, primarily due to lower production from the KG-D6 block and higher maintenance-related costs. This was partly offset by improved gas price realisations and higher coal bed methane output.
Refining margins benefited from the continued import of discounted Russian crude under long-term contracts with Rosneft. Russian oil accounted for 54% of Reliance’s total imports, up from 41% a year ago, according to energy analytics firm Kpler.
Any disruption in access to discounted Russian barrels could pressure margins further, according to analysts, particularly as the European Union’s ban on refined products made from Russian-origin crude comes into effect early next year.
Reliance’s capital expenditure during the quarter touched Rs 40,010 crore, directed largely toward expanding its O2C capacity, enhancing Jio’s 5G infrastructure, widening its retail network, and investing in new energy giga factories. Depreciation and finance costs rose 13% and 14% respectively, reflecting the capitalisation of 5G assets and ongoing project execution. Tax expenses climbed 18% year-on-year to Rs 6,978 crore.
While the quarter’s profit fell short of Street forecasts, most analysts view it as a temporary moderation amid strong underlying fundamentals.