Reliance Industries (RIL) on Friday reported a consolidated net profit of Rs 18,645 crore for the October-December quarter, up 0.6% year-on-year but below Bloomberg estimates of Rs 19,896 crore, as higher costs and weaker earnings from retail and the oil and gas business offset strength in its oil-to-chemicals operations.
Revenue from operations rose 10.5% year-on-year to Rs 2.69 lakh crore, beating Bloomberg’s estimate of Rs 2.58 lakh crore.
Earnings before interest, tax, depreciation and amortisation rose around 6% year-on-year to Rs 46,018 crore but also missed Bloomberg’s estimate of Rs 47,888 crore. The miss at the profit level was driven less by operating weakness and more by a sharp rise in depreciation, finance costs and taxes, alongside limited incremental profit contribution from retail and a decline in upstream earnings.
Depreciation increased nearly 11% year-on-year to Rs 14,622 crore, reflecting capitalisation of investments across businesses. Finance costs rose 7% to Rs 6,613 crore, largely due to the operationalisation of spectrum and other large assets, while tax expenses climbed over 10% to Rs 7,530 crore, compressing the translation of operating gains into net profit.
O2C Engine
The oil-to-chemicals business remained the main support to consolidated earnings. Segment revenue rose 8.4% year-on-year to Rs 1.62 lakh crore, while Ebitda increased 14.6% to Rs 16,507 crore, aided by a sharp improvement in transportation fuel cracks, high refinery utilisation and better sulphur realisations. These gains were partly offset by weaker downstream chemical margins and higher feedstock freight costs. The company said favourable ethane cracking economics and domestic market placements helped sustain petrochemical profitability amid mixed demand conditions.
Petrochemical demand trends were uneven during the quarter. Domestic demand for polypropylene and polyethylene increased year-on-year, supported by consumer goods, automotive and packaging segments. In contrast, PVC demand declined due to prolonged monsoon conditions that weighed on construction and agricultural activity, while PET demand fell sharply as heavy rains reduced operating rates in the beverage sector. Polyester chain margins were marginally lower amid muted textile demand, though stronger paraxylene spreads offered some support.
Retail performance also weighed on the bottom line. While revenues grew year-on-year, Ebitda growth was muted and margins declined, limiting operating leverage. Higher costs and continued investments meant retail contributed little incremental profit in the quarter, even as it supported topline growth. The capital intensity of store additions and back-end infrastructure also fed into higher consolidated depreciation.
Strategic Divergence
The oil and gas exploration and production business was a clear drag. Revenue declined 8.4% year-on-year to Rs 5,833 crore, while Ebitda fell 12.7% to Rs 4,857 crore, reflecting lower volumes and price realisations from the KG-D6 fields and higher operating costs linked to maintenance activity. Given the segment’s high margins, the decline had a disproportionate impact on consolidated profit growth.
Capital expenditure during the quarter stood at Rs 33,826 crore, driven by ongoing investments in oil-to-chemicals projects, new energy initiatives and network expansion. Despite elevated capex, the balance sheet remained steady, with net debt at Rs 1.17 lakh crore and net debt-to-Ebitda at 0.57 times, broadly unchanged from a year earlier.
Commenting on the results, Mukesh Ambani, chairman and managing director, said, “Reliance’s consolidated performance reflects consistent financial delivery and operational resilience across businesses”. He added that Reliance is entering a new phase of value creation with its initiatives in the AI and New Energy domains. “I am confident that Reliance will play a pioneering role in the evolution of these epoch-defining technologies,
providing sustainable solutions at scale for India and the world,” Ambani said.
Ahead of the results, RIL shares closed down 0.06% at Rs 1,457.60 on BSE.