RIL Q3 profit up 2% as weak oil output offsets O2C, telecom gains
Mumbai: Reliance Industries Ltd reported weak profit growth for the October-December quarter as weak earnings from oil exploration and production activities as well as slowing margin expansion in retail offset rising earnings in other key businesses.
India’s most valuable company reports 2% increase in consolidated profit in the third quarter ₹22,167 crore ₹21,804 crore in the same period of the previous year. The company announced a profit ₹22,146 crore in the 2nd quarter of FY26.
Consolidated revenue growth outperformed, rising 11%. ₹Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 5% to 2.69 trillion. ₹46,018 crore.
“Reliance’s consolidated performance in 3QFY26 reflects consistent financial delivery and operational flexibility across businesses,” the company’s chairman and managing director Mukesh Ambani said in a media release.
Reliance said its new energy business is shaping up well, with solar cell production lines becoming operational in the quarter and a pilot line set up for the production of ingots and wafers used in making solar cells. Even though all production line equipment has reached the Jamnagar facility, battery cell production remains behind schedule.
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 scheduled to launch in the first half of 2026.
Independent equity consultant Ambareesh Baliga said the result was “more or less in line with market expectations”. “O2C business and Jio were better than expected, but we will have to see how margins fare if we continue with Russian crude oil withholding.”
Nirav Karkera, head of research at asset management firm Fisdom, also said the overall pressure appeared to be in line with expectations. Karkera added that progress in public listing of key sectors and the pace of progress and monetization of investments in new energy and digital technology will be important points to keep an eye on.
Shares of Reliance Industries closed 0.06% lower on the BSE on Friday, compared to a 0.23% gain on the benchmark Sensex. The results were announced after Sunday time.
It has underperformed the benchmark since the beginning of the year, losing more than 7% compared to a less than 2% decline in the Sensex.
What held back earnings growth?
The company’s oil and gas businesses and retail sales were a drag on its profits, even though its core O2C sector as well as its telecom and digital sectors were performing well.
Production of the company’s key KG-D6 oil block fell as expected, resulting in an 8% decline in revenues. ₹5,833 crore for the company’s oil and gas business and a 13% decline in EBITDA. ₹4,857 crore.
Retail sector EBITDA increased by only 1% ₹6,915 crore despite revenues rising 8% YoY ₹97,912 crore (before cuts), which was slower than other sectors like telecom.
The company attributed the margin squeeze in retail to higher discounts during the Diwali festival period, a one-off impact of the introduction of new labor laws in India and higher investments in its hyperlocal e-commerce business JioMart.
Big gets bigger
Meanwhile, the company’s basic oil-to-chemicals (O2C) segment reported rising earnings due to increased fuel fracturing (the margins that refineries get for processing crude oil) around the world. Ukraine’s attacks on Russian refining infrastructure have reduced global fuel refining capacity, and seasonal increases in demand for diesel have led to improved margins for existing refineries.
O2C revenue growing at over 8% annually ₹1.62 trillion constitutes almost half of the company’s revenue before accounting for inter-segment revenues and collected GST. The EBITDA segment was: ₹16,507 crore as reported by the company.
“Strong growth in the O2C business was led by significantly higher fuel margins with favorable demand-supply dynamics along with operational flexibility,” Ambani said.
“I am pleased to highlight the strong growth in our fuel retail business coupled with the continued expansion of the Jio-bp network,” he added. There are 2,125 sales points in the fuel retail network.
However, the segment’s chemicals business in the plastics and polyester-producing downstream sector continued to weaken due to lower global demand and higher input costs.
Telecom aims to grow
Higher subscriber base and better earnings per subscriber helped Reliance increase the contribution of its telecommunications business to its consolidated financial statements.
The company’s digital business segment, which includes IPO subsidiary Jio Platforms Limited, reported a 12% growth in revenues. ₹44,653 crore before deducting inter-departmental revenues and taxes. This segment’s EBITDA contribution increased by 16% year-on-year. ₹19,325 crore – the highest for all the company’s business segments.
Jio’s subscribers grew by nearly 9 million in the quarter to over 515 million, retaining its position as India’s largest telecom network. Average revenue per user (Arpu) also improved ₹from 213.7 ₹211.4 in the previous quarter. The company said the increase in Arpu was due to the change in consumer mix and value-added services and there was no tariff increase during the quarter.
Fisdom’s Karkera said Arpu growth is expected to accelerate in the coming quarters along with tariff increases, “but the foundation is strengthening with strong subscriber additions.”
Reliance Consumer Private Limited, the company’s FMCG business, has been demerged from Reliance Retail Private Limited with effect from December 1 and has become a direct subsidiary of parent Reliance Industries. Gross revenue for the segment was as follows: ₹5,065 crore was achieved during the quarter, the company said, without disclosing further financial information.
