Reliance Industries' oil-to-chemicals (O2C) segment posted a record quarterly EBITDA of ₹17,010 crore, driven by a surge in fuel cracks and chemical margins. Despite this growth, production volumes dipped due to scheduled plant maintenance and domestic retail under-recoveries. The performance highlights the division's ability to capitalize on refining economics while managing ongoing cost pressures.
Reliance Industries Limited reported a strong financial performance for its oil-to-chemicals (O2C) business for the June quarter. The division achieved an EBITDA of ₹17,010 crore, marking its highest operating profit in four years. This performance surpassed both the previous quarter’s figure of ₹14,520 crore and the year-ago period’s ₹14,511 crore. The division's EBITDA margin also saw an improvement, rising to 8.4% from 7.9% in the preceding quarter.
The recovery was largely supported by favorable market conditions for refined products and petrochemicals. Transportation fuel cracks, which measure the profit margin between crude oil and refined products, increased significantly during the period, with middle distillate cracks reaching record highs. Additionally, downstream chemical margins were boosted by higher product spreads and the cost efficiency of using ethane for cracking instead of naphtha. Specifically, polyethylene spreads rose 79.1% sequentially, while polypropylene deltas grew by 66.4%.
While the O2C segment demonstrated strong momentum, the company navigated several operational challenges during the quarter. Production available for sale fell by 9.8% year-on-year to 15.6 million metric tonnes. This decline was primarily attributed to scheduled maintenance activities at the crude distillation and coker units, which limited output. Furthermore, financial performance was affected by the government's Special Additional Excise Duty on fuel exports and domestic fuel retailing, which continue to operate under margin pressure.
The company's fuel retail network, operating under the Jio-bp brand, expanded to 2,221 outlets. While petrol sales volumes showed a healthy year-on-year increase of 16.8%, diesel demand experienced a slight decline of 1.9%. These retail trends are important to monitor, as they reflect shifting consumer demand and competitive pricing dynamics within the domestic fuel market.
Looking ahead, the company continues to focus on its broader strategic goals, including the phased commissioning of New Energy projects and the potential value unlocking from its digital services unit. For investors, the next critical monitorables include the sustainment of high fuel cracks amid global volatility, the impact of policy decisions on excise duties, and the operational progress of upcoming energy infrastructure projects. The ability to maintain these improved margins while ramping up production post-maintenance will be a key indicator of the segment's underlying health in the coming quarters.