Record earnings! 5 big takeaways from RIL Q2 results investors should watch for Monday trading

Just two days after Jio Platforms made a blockbuster debut on Dalal Street, Mukesh Ambani-led Reliance Industries (RIL) delivered strong results on Friday, reporting its highest-ever quarterly profit and revenue, powered by a sharp recovery in its oil-to-chemicals business and continued growth in digital services.

Reliance's consolidated profit, including its share of earnings from associates and joint ventures, jumped 33.8% year-on-year (YoY) to a record Rs 29,550 crore in the September quarter, compared with Rs 22,092 crore a year earlier.

Gross revenue surged 28% to an all-time high of Rs 3.62 lakh crore, while EBITDA climbed 23.9% to a record Rs 62,409 crore. Sequentially, profit rose 27.4% and EBITDA increased 15.4%.

The results came in the same week that Jio completed India's largest IPO, raising Rs 30,188 crore and making its stock market debut at a premium exceeding 21%.

While Reliance's refining business delivered a bumper quarter and Jio maintained strong operating momentum, retail and some other businesses faced pressure on profitability.

Here are five key takeaways from Reliance's September-quarter earnings.

1) Record profits put Reliance on course for a landmark year

Reliance reported its highest-ever quarterly EBITDA of Rs 62,409 crore, up from Rs 50,367 crore a year earlier, driven primarily by stronger refining margins. Profit before tax rose 32.6% to Rs 38,613 crore, while quarterly profit, including earnings from associates and joint ventures, reached a record Rs 29,550 crore.

The conglomerate also crossed the Rs 50,000 crore profit mark in the first half of FY27 for the first time, reporting Rs 52,746 crore compared with Rs 43,951 crore in the corresponding period last year.

However, consolidated EBITDA margin declined 60 basis points YoY to 17.2%, reflecting differences in growth and profitability across its businesses. The margin improved from 15.9% in the June quarter.

2) O2C business steals the show

Reliance's O2C business was the biggest contributor to the earnings surprise, with EBITDA jumping 67.9% YoY to an all-time high of Rs 25,203 crore. Revenue increased 44.2% to Rs 2.32 lakh crore, supported by elevated crude oil prices, strong transportation fuel margins and better petrochemical realisations.

The sharp increase in global refining margins played a crucial role. Diesel refining cracks surged 252% to $65.8 per barrel, while jet fuel cracks climbed 268% to $59.3 per barrel. Gasoline cracks rose 196% to $24.9 per barrel.

The business also benefited from improved refinery utilisation. Throughput increased to 20.6 million tonnes from 18.1 million tonnes in the preceding quarter following planned maintenance.

O2C EBITDA jumped 48% sequentially, while the segment's operating margin expanded to 10.9% from 9.3% a year earlier.

3) Jio delivers strong first results after its blockbuster IPO

Jio Platforms' first earnings announcement as a listed company showed continued growth in profitability, subscriber additions and customer spending.

The telecom and digital services company's net profit increased 14% YoY to Rs 8,387 crore, while revenue from operations rose 11% to Rs 40,475 crore.

EBITDA climbed 17% to Rs 21,879 crore, with the margin expanding 250 basis points to 54.1%. Jio added 91 lakh subscribers during the quarter, taking its customer base to 54.24 crore. Its average revenue per user (ARPU) increased to Rs 218.8 from Rs 215.6 in June.

The company also crossed two significant milestones, with its 5G subscriber base exceeding 30 crore and fixed broadband connections reaching 3 crore.

The results followed Jio's Rs 30,188 crore IPO and October 28 listing, which made it India's second-most valuable listed company. Jio said it had already utilised Rs 27,500 crore of the IPO proceeds to repay or prepay borrowings at Reliance Jio Infocomm.

4) Reliance Retail profit falls 25% despite higher sales

Reliance Retail emerged as one of the weaker spots in the quarterly results, reporting a 24.5% YoY decline in net profit to Rs 2,619 crore. Gross revenue increased 6.4% to Rs 91,716 crore on a comparable basis, adjusted for the demerger of its consumer brands business.

However, EBITDA before a one-time impairment charge declined 8.6% to Rs 6,228 crore, while its margin narrowed to 7.8% from 9%.

The company attributed the pressure to investments in digital commerce, higher input costs absorbed on behalf of customers and the shift of major festive sales to the December quarter.

Reliance Retail also recorded a one-time impairment charge of Rs 108 crore. Still, JioMart delivered 42% revenue growth, highlighting the expansion of Reliance's online grocery business.

The retail network stood at 19,947 stores at the end of September after the company opened 303 stores and closed underperforming outlets.

5) JioStar and oil and gas face pressure, but debt position improves

Reliance's oil and gas exploration business reported a 2% decline in EBITDA to Rs 4,901 crore as lower KG-D6 production and weaker gas realisations weighed on earnings. Segment revenue slipped 0.6% to Rs 6,020 crore, while KG-D6 production declined 9% YoY.

JioStar also reported a decline in profitability despite higher revenue. Its revenue from operations increased 10% to Rs 6,806 crore, while EBITDA fell 14% to Rs 1,502 crore. Net profit declined 13.2% to Rs 1,147 crore.

JioHotstar, however, continued to expand its audience, averaging 44 crore monthly active users during the quarter, up 10% YoY.

On the balance-sheet front, Reliance reported a sequential reduction in net debt to Rs 1,17,140 crore from Rs 1,22,914 crore in June.

Its net debt-to-annualised EBITDA ratio improved to 0.47 times from 0.57 times, while cash and cash equivalents increased to Rs 2.68 lakh crore. Capital expenditure stood at Rs 38,153 crore during the quarter, with investments directed towards energy, new energy projects and the group's consumer businesses.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.
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