RIL Q3 profit up 2% as weak oil output offsets O2C, telecom gains

Mumbai: Reliance Industries Ltd reported muted profit growth for the October–December quarter, as weaker earnings from its oil exploration and production business, along with slower margin growth in retail, offset improved earnings across other key businesses.

India’s most valuable company posted a 2% rise in consolidated profit in Q3 to ₹22,167 crore from ₹21,804 crore in the year-ago period. The company had reported a profit of ₹22,146 crore in Q2 of FY26.

Growth in consolidated revenue fared better, rising 11% to ₹2.69 trillion, while earnings before interest, tax, depreciation and amortization (Ebitda) were up 5% to ₹46,018 crore.

“Reliance’s consolidated performance in 3QFY26 reflects consistent financial delivery and operational resilience across businesses,” Mukesh Ambani, the company’s chairman and managing director, said in a media statement.

Reliance said its new energy business was shaping well, with solar cell manufacturing lines becoming operational during the quarter and a pilot line set up for producing ingots and wafers that are used to make solar cells. Battery cell production remains behind schedule, despite all production-line equipment having reached the Jamnagar site.

However, the company did not provide a timeline for the much-anticipated initial public offering (IPO) of its telecom business under Jio Platforms Limited, which is guided for a market debut in the first half of 2026.

The result was “more or less in line with market expectations,” said Ambareesh Baliga, an independent equities consultant. “O2C business and Jio were better than expected, but going ahead with Russian crude stoppage, we will need to see how margins will play out.”

Nirav Karkera, head of research at wealth management firm Fisdom, too, said the overall print appeared to be aligned with expectations. Progress on the public listing of key verticals and the pace of progress and monetisation of investments being made in new energy and digital technology will be the key points to look out for, Karkera added.

The Reliance Industries stock ended 0.06% lower on the BSE on Friday compared to a 0.23% gain in benchmark Sensex. The results were announced after market hours.

The scrip has underperformed the benchmark since the beginning of the year, losing more than 7% compared to a less than 2% dip in the Sensex.

What pulled back earnings growth

The company’s oil and gas business and retail were a drag on its profits, even as its core O2C vertical as well as telecom and digital performed well.

Production from the company’s key KG-D6 oil block fell as expected, resulting in an 8% fall in revenues to ₹5,833 crore for the company’s oil and gas business, and a 13% slide in Ebitda to ₹4,857 crore.

Retail vertical’s Ebitda grew just 1% to ₹6,915 crore, even as revenues were up 8% year-on-year to ₹97,912 crore (before deductions), which was slower than other verticals such as telecom.

The company attributed the margin squeeze in retail to higher discounting during the Diwali festive period, a one-time impact from the introduction of the new labour codes in India, and higher investments in its hyperlocal e-commerce business JioMart.

Big gets bigger

Meanwhile, the company’s key oil to chemicals (O2C) segment reported improved earnings on the back of elevated fuel cracks — margins made by refineries for processing crude oil — across the globe. Ukrainian attacks on Russian refining infrastructure have reduced global fuel refining capacity and the demand for diesel has seen a seasonal spike, resulting in better margins for existing refiners.

O2C revenue grew over 8% year-on-year to ₹1.62 trillion, accounting for almost half of the company’s topline before accounting for inter-segment revenues and GST collected. The segment Ebitda was ₹16,507 crore, as reported by the company.

“Robust growth in O2C business was led by significantly higher fuel margins with favourable demand-supply dynamics, along with operational flexibility,” Ambani said.

“I am happy to highlight the strong growth in our fuel retailing business, with continuing expansion of the Jio-bp network,” he added. The fuel retailing network has 2,125 outlets.

However, the segment’s downstream chemicals business, which makes plastics and polyester, continued to languish due to low global demand and higher input costs.

Telecom dials growth

A higher subscriber base and better earnings per subscriber have helped Reliance’s telecom business improve its contribution to its consolidated financials.

The company’s digital business segment — which includes Jio Platforms Limited, the IPO-bound entity — reported a 12% growth in revenue to ₹44,653 crore, before deducting inter-segment revenues and taxes. Ebitda contribution from this segment grew 16% year-on-year to ₹19,325 crore — the highest for any of the company’s business segments.

Jio's subscribers grew by nearly 9 million during the quarter to over 515 million, maintaining its position as the largest telecom network in India. Average revenue per user (Arpu) also improved to ₹213.7 from ₹211.4 during the preceding quarter. The increase in Arpu was due to a change in consumer mix and value-added services and there was no tariff hike during the quarter, the company said.

Karkera of Fisdom said Arpu growth is expected to pick up pace through the upcoming quarters coupled with tariff hikes, “but the foundation has been strengthening through strong subscriber addition”.

Reliance Consumer Private Limited, the company’s fast moving consumer goods business, was demerged from Reliance Retail Private Limited effective 1 December to become a direct subsidiary of parent Reliance Industries. The segment had gross revenues of ₹5,065 crore during the quarter, the company said, without disclosing more financial information.