Q3 earnings preview: Reliance’s cash engines fire together—now investors want dates

Mumbai: Billionaire Mukesh Ambani-led Reliance Industries is on the cusp of unlocking significant value for shareholders as all its key businesses generate free cash flows simultaneously for the first time and a public listing of its telecommunications business is imminent. Now, investors want firm timelines.

As the company-guided timeline for listing Reliance Jio Platforms in the first half of 2026 draws closer, investors will be keen on a status update when the management shares its Q3 earnings on Friday, experts said.

Investors will also look for material updates on the progress of its new energy, artificial intelligence, and consumer goods businesses, which have long been touted as the conglomerate’s next growth engines, with most cash flows for the coming years expected to fund these ventures.

"Investors want to know the timeline of the Jio IPO. That's the top thing on everyone's mind as it will mean huge value unlocking," said Sudip Bandyopadhyay, group chairman at financial services firm Inditrade Capital Ltd. "What they are planning to do with the retail business is also very important – whether they unlock value by bringing in more partners or demerge it. Both businesses have become too big."

Reliance is setting up a mega-new energy complex near its oil refinery in Jamnagar, where the company plans to build everything from solar panels and renewable electricity to green hydrogen. However, the timelines on these projects remain far from firm, and delays are emerging in operationalizing at least one key project – making battery cells that are crucial for storing the clean energy that the company plans to generate.

Earnings estimates

Reliance Industries is estimated to report a 15% rise in profit to ₹21,317 crore and an 8% year-on-year growth in its topline to ₹2.58 trillion for the quarter ended 31 December, according to the consensus estimate of three brokerages including Motilal Oswal, PL Capital and Yes Securities.

Earnings before interest, tax, depreciation and amortization (Ebitda) are projected to grow by a tenth to ₹48,574 crore.

Reliance Industries has three key businesses – refining, telecommunications and retail. Its oil-to-chemicals segment, which includes refining oil into downstream chemicals, brings half of the company’s revenue and almost a third of its consolidated Ebitda.

The retail segment, which includes its retail stores and its rapidly scaling fast-moving consumer goods (FMCG) business, brings in over a quarter of the consolidated revenue and about 14% of the consolidated Ebitda. The digital services segment, which includes telecommunications and other digital services of Jio Platforms, brings less than 15% of the revenue but about 40% of Ebitda.

The company also has an oil exploration and production segment, which brings a modest 2% of the revenue and a tenth of the profit. The remainder comes from smaller businesses classified as the ‘other’ segment.

Investments bearing fruit

Analysts at Morgan Stanley said that Reliance Industries is entering a monetization cycle – its fourth in 30 years – with its refining, retail and telecom businesses simultaneously turning free cash flow-positive for the first time ever in FY26. The company invested an estimated $80 billion in the past five years, as per the analysts, and “all of it should start to bear fruit from 2026."

The company invested heavily in rolling out 5G connectivity in its telecom business in recent years, with the capex now tapering. Couple that with a steady increase in the number of subscribers and an increase in tariff, and the business is generating free cash ahead of its IPO.

Jio’s subscriber base has exceeded 500 million, while its average revenue per user (Arpu) is estimated by brokerages to reach ₹211-214. The future projects of Arpu growth are bullish, with brokerages pencilling an Arpu of ₹252-262 by FY28.

Meanwhile, the crude oil refining business is reaping the benefits of a shortage of global refinery capacity and constraints on existing Russian and Ukrainian capacities amid the ongoing war.

The retail business is also delivering, with its consumer goods business scaling up after significant investments in acquiring brands and setting up distribution.

“RIL's consumer brand business has quickly scaled to a level near that of peers like ITC's FMCG business in about three years of operation, with 75%+ of trade from general merchandise," analysts at Morgan Stanley noted.

No Russian hangover

Analysts estimate that discounted Russian crude oil accounted for more than a third of Reliance’s oil imports during the first nine months of FY26. The cheaper oil directly added to the refining margins of Reliance. With an abrupt halt in the purchase of this discounted oil due to US sanctions, Reliance’s refining margins could take a hit.

A financial model by JP Morgan suggests that discounts per barrel have fallen from a high of upwards of $14 per barrel to $3 or less to the market rate towards August of this year.

Refining margins improved across the industry as a shortage of refining capacity due to Ukrainian attacks on Russian refineries.

“Refining margins remain elevated, driven by resilient crack spreads (the pricing difference between a barrel of crude oil and the refined products obtained from it) due to continued Ukrainian drone attacks on Russian refineries and refinery maintenance outages reducing global availability of refining capacity in Q3FY26," analysts at PL Capital noted, adding that the benchmark Singapore GRM (gross refining margin) improved to $4.9 per barrel in Q3FY26 from $4 per barrel in the preceding quarter.

Rising fuel cracks globally are compensating for much of the margin hit that Reliance would take after cutting down the procurement of Russian oil, the discounts on which were already falling. Analysts said this is a short-term phenomenon because the refining capacity crunch will be overcome with new refineries coming up and repairs to the damaged Russian infrastructure.

Question of timelines

Analysts said the key triggers for rerating of the stock in the coming months will be the IPO of Jio, material progress in the FMCG business, and operationalization of the new energy complex at Jamnagar.

“RIL’s New Energy rollout shall not only add 50%-plus to PAT, but also re-rate valuations, including the O2C business given its net zero-carbon target by 2035," analysts at Nuvama Institutional Equities noted in November.

However, multiple brokerages have highlighted that a delay in operationalizing the new energy complex will be a key investment risk. This further increases the imperative for the company to give firm timelines on its plans.

The company’s planned battery cell plant at Jamnagar is now slated to start in 2026 instead of the already delayed schedule of 2025. A report by Bloomberg suggested that the plant could face further delays after a failed technology tie-up with a Chinese partner. Reliance Industries has dismissed this report, re-affirming that it will be sticking to its guided timelines.

KG-D6 oil block dispute

Apart from its financial performance, Reliance investors will watch for management commentary during the post-earnings analyst meeting on the ongoing dispute with the Indian government regarding KG‑D6 offshore oil and gas block.

The Indian government has raised a demand of $30 billion from the company during a private arbitration over underproduction from the block, Reuters reported on 29 December, citing unidentified people. Reliance refuted the report.

“There is NO claim of $ 30 Billion against Reliance and BP," the company said. “The matters referred to in the report are entirely sub judice and would be determined in accordance with the laws of the country by its judicial system, in which Reliance has full faith."

Reliance shares have lost over 8% since the beginning of 2026 compared with a 2.27% dip in the benchmark Sensex.