Whalesbook
Reliance Industries (RIL) is set for a moderated year-on-year EBITDA growth of 7-9% in the third quarter of FY26. This is a noticeable slowdown from the 15% growth seen in the previous quarter. The main reason for this slowdown is Reliance Retail, whose growth is expected to decelerate.
Reliance Retail's sales growth is projected to cool down to about 10% year-on-year in Q3FY26, much lower than the 21.3% in Q2FY26. Analysts believe this is due to a high comparison base, the festival season shifting, and current retail demand trends. EBITDA for the retail business is expected to grow only about 6% year-on-year.
On the other hand, the Oil-to-Chemical (O2C) and Jio segments are expected to show strong double-digit year-on-year EBITDA growth. Goldman Sachs estimates O2C EBITDA to increase by 16% year-on-year, thanks to better refining earnings which more than make up for lower petrochemicals. Strong refining margins are likely to continue because of tight global capacity and supply issues.
Jio Infocomm is expected to add around 9.5 million subscribers in Q3FY26, driving a projected 12% year-on-year revenue growth (excluding fixed/enterprise). Kotak Institutional Equities forecasts Jio's EBITDA to rise by 15% year-on-year, with the Average Revenue Per User (ARPU) reaching ₹214.
Brokerages like Morgan Stanley and Kotak Institutional Equities point out that refining margins for the O2C business will remain strong. Morgan Stanley expects refining margins to stay above $12/bbl. While petrochemical earnings might see some pressure sequentially, the overall impact is expected to be limited. The general view is that RIL will have a mixed but fundamentally solid quarter, with O2C and Jio's growth compensating for a slower performance in Retail.