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(Bloomberg) — Reliance Industries Ltd., controlled by billionaire Mukesh Ambani, reported a better-than-expected quarterly profit, as a recovery in its oil-to-chemicals business added to a strong show by consumer-facing units.
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Net income rose 2.4% to 194.1 billion rupees ($2.3 billion) in the three months ended March 31, according to an exchange filing Friday. That beat the 184.71 billion rupees average of analyst estimates compiled by Bloomberg.
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The refining-to-retail conglomerate reported a 10% surge in revenue to 2.65 trillion rupees with total costs also climbing by as much to 2.4 trillion rupees. More than half of the revenue came from the oil-to-chemicals business, which rose 15% compared with the same quarter last year. Retail revenue rose 16% and digital services advanced 18%.
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The board of India’s largest company by market value also approved raising as much as 250 billion rupees via bonds, the filing said. A dividend of 5.5 rupees per share was also announced.
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The energy business “posted a resilient performance despite considerable volatility in energy markets,” Mukesh Ambani, chairman for Reliance said in a statement.
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Projects in renewable energy and battery operations will see a transition of “from incubation to operationalization” in the coming quarters, Ambani added without sharing details.
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Key Insights
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- While demand-supply imbalances in chemicals markets led to multi-year low margins, the brokerages expect refining margins to get a boost from changing market dynamics.
- Goldman Sachs Group Inc. analysts, including Nikhil Bhandari, estimated in a March 28 note that nearly 1 million barrels a day of refinery capacity to close permanently across the world this calendar year
- Reliance operates the world’s largest refining complex at Jamnagar in Gujarat
- Reliance is set to see “multiple legs of growth,” Morgan Stanley analysts including Mayank Maheshwari said in a report this month, as improving petrochemical margins, retail recovery with store rationalization and starting of green energy verticals support growth in the year ending March 2026
- Sell-side analysts are the most bullish on Reliance since 2008, with more than 92% of the 39 brokerages tracked by Bloomberg having a buy recommendation highlighting its cheap valuation and a potential recovery
- US’s decision to exempt refined product imports from the recent round of tariff announcement is a positive for Reliance, Morgan Stanley said earlier this month
- Reliance Retail, a sector bellwether that sells groceries to toys and cosmetics to global fashion brands, posted a robust performance on the back of better product mix and formats. It’s an early sign that India’s year-long consumption slump may be easing
- Ambani’s retail and e-commerce businesses, however, may face a threat if India makes concessions in its trade deal with the US that allows greater market access to American giants such as Amazon.com Inc. and Walmart Inc.
- Ambani-controlled Jio Platforms Ltd. announced a surprise pact in March with SpaceX to offer Starlink Inc.’s satellite internet services in India, a day after rival Bharti Airtel Ltd. unveiled a similar arrangement.
- The tie-ups recast country’s two largest wireless operators as allies instead of challengers to the Elon Musk’s firm. India is yet to announce spectrum pricing for satellite internet services.
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Market Reaction
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- Reliance’s shares gained 4.91% during the quarter ended March 31, compared with a 0.93% decline in the benchmark BSE Sensex index
- Earnings were announced after the close of market hours
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- Reliance Jio Infocomm net income jumped 24% to 66.4 billion rupees, boosted by price hikes in July
- Jio’s subscriber base rose 1.3% q/q to 488.2 million subscribers by quarter end; average-revenue-per-user at 206.20 rupees
- Reliance Retail posted a quarterly profit of 35.45 billion rupees, up 29.1% on year
- Net debt, as of March 31, was at 1.17 trillion rupees, +1.4% q/q, while cash and cash equivalents were 2.30 trillion rupees
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—With assistance from Satviki Sanjay.
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