Reliance Industries reported record consolidated EBITDA of Rs 62,409 crore, up 24% YoY, driven by stellar growth in its Oil-to-Chemicals segment and steady digital services performance. While retail margins faced pressure from strategic infrastructure investments, the firm's 5G rollout and refined product demand bolstered overall earnings.
Reliance Industries Reports Record Q2 Performance
Consolidated PAT reached nearly Rs 30,000 crore, up 34% YoY.
Consolidated EBITDA surged to an all-time high of Rs 62,409 crore, a 24% increase.
Reader Takeaway: Strong O2C refining margins fueled record profits, while retail margin compression reflects necessary long-term infrastructure investment.
What just happened
Reliance Industries has delivered a robust set of numbers for the second quarter, highlighted by a significant 34% year-on-year increase in profit after tax. The growth was primarily powered by the Oil-to-Chemicals (O2C) segment, which saw a 69% jump in EBITDA to Rs 25,203 crore. The company successfully navigated complex global supply chain dynamics to maintain high refining margins, while its digital services arm, Jio, continued its steady growth trajectory.
Why this matters
The record EBITDA figure demonstrates Reliance's ability to capitalize on tight fuel markets. Jio’s performance remains a key highlight, with the subscriber base hitting 542 million, including 300 million 5G users. The growth in ARPU to Rs 218.8, achieved without tariff hikes, signals strong user stickiness and a successful transition toward 5G services as capital expenditure for the network deployment begins to taper off.
Segment Performance
- O2C: Operational agility in crude sourcing helped the company offset geopolitical supply disruptions. Strong demand for gasoline, diesel, and jet fuel provided a significant tailwind.
- Jio: Digital services revenue grew 11.4% to Rs 40,475 crore. The business is now shifting from a massive deployment phase to focusing on monetization and efficiency.
- Retail: Revenue grew 6.4%, though EBITDA fell 11% to Rs 6,228 crore. The management has framed this as a tactical period of heavy investment in digital commerce, dark stores, and customer acquisition, which is expected to yield results from the next fiscal year.
Risks to watch
The primary concern for investors remains the margin pressure in the retail segment, intensified by the aggressive growth of quick commerce competitors. Additionally, while the company’s new energy initiatives are progressing, they remain a multi-year project with commercial contributions only expected by FY 2028. Continued volatility in crude oil prices and global shipping routes remains a persistent factor for the O2C business.
What to track next
Watch for the integration of new digital commerce infrastructure and the impact of the ongoing investments in the retail segment. Investors should also track the commissioning of solar and battery facilities as the company moves closer to its New Energy goals.