Base-effect saves RIL Q2; a dilemma is now coming to the fore

O2C saw several quarters of lower EBITDA in FY25, both in absolute terms and per tonne of crude oil production (the amount of crude oil processed). This helped the annual revival in the second quarter of 2026. However, O2C saw a 5% sequential decline in EBITDA/per tonne of crude oil processed in Q2 2026. Crude oil production or volume increased by 9% sequentially to 20.8 million tonnes, but this led to an increase in absolute EBITDA of only 3% as the higher supply price of crude oil, including transport costs, was likely to negatively impact the margin per tonne. Overall, RIL’s consolidated EBITDA increased by 17.5% YoY ₹45,885 crore.

With 2FY26 earnings disappearing, investors may face a dilemma; This is the holding company discount. The listing of Jio Platforms is likely to happen in the first half of 2026 and may be followed by the listing of Reliance Retail. Therefore, those who want to invest in these verticals can directly purchase the relevant stocks instead of RIL shares. RIL has a 66% stake in Jio Platforms, which may come down to around 63% post-listing if a minimum dilution of 2.5% is assumed as per the Securities and Exchange Board of India’s (Sebi’s) revised norms for listing.

investment dilemma

For perspective, Grasim Industries holds a 56% stake in UltraTech Cement; This won’t be much different from RIL’s stake in Jio Platforms after its listing. Brokerages like Motilal Oswal Financial Services and ICICI Securities have discounted UltraTech’s valuation by 35-40% while calculating the sum of the parts (SoTP) for Grasim. Now, like Grasim, there is a possibility that RIL’s stake in Jio Platforms may also appreciate after applying the holding company discount. There is an argument for no or lower holding company discount, given the small public issue size of Jio Platforms after Sebi relaxed the norms. However, this is worth nothing as there may be enough liquidity that private equity investors, who hold around 16% stake in Jio Platforms, may consider selling post-listing.

Meanwhile, Reliance Retail was going through a process of restructuring its operations in H25; where he fine-tuned B2B operations and closed unprofitable stores. Thus, leading to a revenue decline of approximately 4% this quarter. In this context, 19% annual increase in income ₹79,128 crore in the second quarter looks impressive. Still, Reliance Retail is fighting the competition by reaching 600 dark stores. That number may seem small compared to Blinkit, which is approaching 2,000 dark stores. But Reliance Retail’s dark stores are complementary to its vast network of 20,000 stores spread across all cities, unlike the concentrated stores of fast-track companies, especially in major cities. This could give Reliance Retail an edge over other flash commerce and E-commerce companies.

Additionally, Jio’s average revenue per user (Arpu) increased by 8% year-on-year, although it increased by only 1% sequentially. ₹The tariff increase in July 2024 became 211, as it began to gradually increase Arpu from the second quarter of 2025. The administration has no intention of increasing tariffs further any time soon. This could lead to a slowdown in Arpu growth in H26, resulting in lower EBITDA. Meanwhile, in 2025, RIL stock is up 16% so far and has returned 8% against the Nifty 50 benchmark index; Jio Platform’s IPO remains a major short-term event for the stock.