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(Bloomberg) — Reliance Industries Ltd. reported a lower-than-expected quarterly profit as sluggish growth in the petrochemical and retail businesses offset a strong showing in its refining and telecom units.
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Net income inched up 0.6% to 186.5 billion rupees ($2.1 billion) for the three months ended Dec. 31, 2025 compared with a year earlier, according to an exchange filing Friday. That fell short of the 198.96 billion-rupee average of analyst estimates compiled by Bloomberg.
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Revenue at the refining-to-retail group, controlled by billionaire Mukesh Ambani, rose 11% to 2.69 trillion rupees, on the back of a larger-than-expected 8% rise in its crude oil refining business. Total costs jumped 12% to 2.45 trillion rupees.
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Robust growth in the company’s energy business “was led by significantly higher fuel margins with favorable demand-supply dynamics, along with operational flexibility,” Chairman Ambani said in a post-earnings statement.
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Key Insights
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- The latest quarterly earnings were constrained by higher freight rates and weak downstream margins, Reliance said in a post-earnings presentation, referring to the weakness in the petrochemical business. “Overcapacity in Asia with startup of new crackers to weigh on near-term margins,” it added.
- Petrochemical earnings were hurt amid global overcapacity, with Jefferies noting margins at 15-year lows in a Jan. 6 report.
- Revenue growth at the closely held retail unit was muted on festival demand being spread across two quarters last year and consumption tax changes, Reliance said in the presentation. Rival Trent Ltd. had flagged sector stress earlier this month.
- Retail Ebitda margins were lower due to festival promotions, investments in hyper-local commerce and a new labor code. Reliance opened 431 stores, pushing the nationwide tally to 19,979 stores.
- Refining margins improved, aided by tighter global product markets after sanctions and refinery disruptions reduced Russia’s fuel exports, alongside global refinery outages and permanent US capacity closures.
- Morgan Stanley in a Jan. 7 note estimated Reliance’s refining margins at $12.3 a barrel — the highest in seven quarters — versus $9.6 a barrel last year. While the company doesn’t disclose its gross refining margins specifically, it said the metric was at a “multi-quarter high.”
- Reliance, which has scaled back imports of discounted Russian crude, is exploring reviving crude supply from Venezuela. Its Jamnagar facility is one of the few refineries in India that can take in even the harder-to-process Venezuelan varieties. Securing this will help offset the loss of Russian barrels as well as diversify feedstock.
- Growth in wireless subscribers and average revenue per user will boost Reliance Jio Infocomm Ltd., India’s largest wireless operator, which is gearing for a listing this year in possibly India’s biggest-ever initial public offering.
- Construction is in full swing for 40 GWh annual BESS assembly and cell manufacturing giga factories, Reliance said in the presentation. The commissioning is planned in various phases during the year, it added. BESS refers to battery energy storage systems.
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Market Reaction
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- Reliance’s shares surged 15% in the October to December quarter but have slipped 7.2% this year on tougher US rhetoric on India’s Russian oil purchases and domestic retail sector slack.
- Earnings were announced after the close of market hours on Friday.
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Get More
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- Reliance Jio’s profit up 11.2% y/y to 76.29 billion rupees
- Reliance Jio’s total user base was at 515.3 million, +1.8% q/q; average-revenue-per-user up 1.1% q/q at 213.70 rupees
- Reliance Retail profit of 35.5 billion rupees, up 2.7% y/y; Ebitda 69.2 billion rupees, +1.2% y/y
- Net debt was at 1.17 trillion rupees, down 1.7% q/q while cash and cash equivalents were 2.3 trillion rupees
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—With assistance from Satviki Sanjay.
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(Updates with details throughout.)
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English (US)