Reliance Industries reported a 25% year-on-year profit decline to ₹23,196 crore for the June quarter, largely due to a one-time gain from an Asian Paints stake sale in the previous year. Despite this, revenue climbed 25% to ₹3.1 lakh crore, driven by strong growth in its oil-to-chemicals and digital services businesses.
Reliance Industries Limited (RIL) reported a 25% decline in consolidated net profit for the first quarter of the current fiscal, settling at ₹23,196 crore. The drop was largely expected by the market, as the company’s profit in the same quarter last year was boosted by an ₹8,924 crore one-time gain from the sale of a stake in Asian Paints. When adjusting for this non-recurring item, the underlying business performance showed resilience.
Revenue Growth and Segment Performance
Revenue for the quarter grew 25% to reach ₹3.1 lakh crore, highlighting strong demand across the company’s diverse business portfolio. The Oil-to-Chemicals (O2C) segment, a traditional backbone of the conglomerate, saw a 17% increase in Earnings Before Interest, Taxes, Depreciation, and Amortization (Ebitda), which stood at ₹17,010 crore. This performance was supported by efficient sourcing of crude oil from diverse markets like Russia and Latin America and the use of lower-cost feedstock. However, the segment also faced pressure from rising freight costs and the reintroduction of special excise duties on fuel.
Reliance Jio, the group’s digital services arm, maintained its growth momentum with a 16% rise in Ebitda to ₹21,255 crore. The company saw a 150 basis point improvement in margins and a 3% increase in Average Revenue Per User (ARPU), which reached ₹216. With a subscriber base of 533 million, Jio continues to leverage its extensive data network, which recorded a 27% growth in data traffic during the period.
Retail and Capital Spending
Performance in the retail segment was relatively flat, with Ebitda edging down by 1% to ₹6,309 crore. While revenue in this segment grew by 8%, increased investments in digital commerce infrastructure and higher operating costs weighed on margins. Smaller segments, such as consumer products, also faced cost pressures, while the entertainment platform JioStar stood out with a 31% increase in Ebitda to ₹933 crore due to better operational efficiency.
Reliance continues to maintain a strong balance sheet with a cash balance of ₹2.46 lakh crore, which is sufficient to cover its net debt of ₹1.22 lakh crore. The company maintains a high level of capital spending, deploying ₹38,682 crore during the quarter. This capital is primarily directed toward long-term growth initiatives, including the development of green energy projects and further expansion of its consumer-facing retail and digital businesses.
Looking ahead, investors will monitor the progress of the company’s green energy transition and the operational impact of its significant capital expenditure. The timing and valuation of the planned Jio IPO remain a key focus area for shareholders, alongside the company’s ability to manage margins in its retail and O2C segments amid potential volatility in global crude and freight costs.