Reliance tops estimates as petrochemicals business stands firm in a turbulent first quarter
Mumbai: Reliance Industries Ltd has had a better-than-expected start to FY27 as a resilient oil refining and petrochemicals business weathered the severe deterioration in global energy markets triggered by the US-Iran conflict, more than offsetting weakness in its retail arm.
The decline in earnings came despite expectations that geopolitical tensions and volatile energy markets would put pressure on Reliance’s flagship oil-to-chemicals (O2C) business, which contributes to more than half of the company’s consolidated revenue.
India’s most valuable company reports consolidated profit ₹20,946 crore attributable to owners in Q1, ahead of consensus estimate ₹19.823 million analysts participated in the survey Bloomberg. This was a 12% increase over the same period last year. ₹8,924 crores were made by one person at that time Share sale in Asian Paints Ltd.
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Reliance Industries reported better-than-expected profit due to strong performance in oil-to-chemicals (O2C); This significantly offset weakness in its retail arm amid geopolitical tensions and volatile energy markets.
The O2C segment performed well in the first quarter of 2027; revenues rose nearly 30% annually to ₹2 trillion; This was above analysts’ expectations despite expected market turbulence.
Profit growth was mainly driven by strong performances in the O2C and digital services segments, which helped cushion the impact of the 14% decline in retail profits.
Geopolitical tensions have led to serious disruptions in global energy markets, but Reliance has managed to maintain strong operational performance, especially in its petrochemical business.
Investors may view the upcoming Jio Platforms IPO as a significant opportunity to participate in India’s digital growth story, especially given Jio’s strong performance and market position.
“Reliance has had a stable start to FY27, with all businesses delivering strong operating performance,” the company’s chairman and managing director Mukesh Ambani said in a statement. “Our diverse portfolio of businesses once again demonstrated its resilience in this quarter that witnessed ongoing geopolitical tensions and unstable commodity markets.”
The Mumbai-based heavyweight’s consolidated revenue in the first quarter was 25% higher year-on-year. ₹3.1 trillion. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by one tenth ₹47,517 crore, while EBITDA margin decreased by 201 basis points (bps) to 15.2%. One hundred bps equals 1%.
“Earnings were better than expectations due to strong O2C (oil to chemicals) performance. Retail was weaker than expected,” said Harshraj Aggarwal, vice-head of institutional equity research at Yes Securities.
Analysts had predicted a weaker quarter for the O2C business due to turmoil in global energy markets, the introduction of special additional consumption duty (SAED), negative marketing margins and possible stock losses.
However, the business reported that revenues increased by almost a third. ₹2 trillion and EBITDA increased by one sixth ₹Even though margins contracted by 100 basis points, it stood at 17,010 crore.
According to Aggarwal, this segment has benefited from both better fuel cracks and aftermarket margins. Cracks refer to the difference between the cost of crude oil and the price of refined products; higher cracks mean better margins for refineries.
“O2C business delivered a strong performance during the quarter, supported by all-time high middle distillate cracks and improved downstream petrochemical deltas,” Ambani said.
“This was achieved despite the challenging global energy market environment, where supply chains were disrupted. Our teams navigated this challenging environment with operational agility and ensured adequate availability of essential fuels and materials in domestic markets,” he added.
Jio Platforms Ltd linked to IPO covering RIL’s telecom and digital businesses. It showed a strong performance in line with expectations. Income increased by more than a tenth ₹39,173 crore and profit increased by one tenth ₹7,764 crore. EBITDA margin increased by 150 basis points ₹53.3%.
The company added nearly 9 million new customers in the quarter and maintained its position as India’s largest telecom operator with 533 million subscribers as of end-June.
Akash Ambani, managing director of Jio Platforms and Mukesh’s elder son, said, “As we move into the next phase of our journey to become a public company in India, we will continue to maintain our deep technology focus and democratize access to digital connectivity and digital services in India and globally.”
Retail was the only disappointment. While revenue increased by 8% ₹79,745 crore, profit down 14% ₹2,806 crore. EBITDA margin narrowed by 80 basis points to 7.9%.
Investors expected Reliance to perform strongly; The stock closed with a gain of 2.59% on Friday. ₹1,326.5 on BSE compared to 1.25% rise in BSE Sensex.
