Reliance Industries Q3 Preview: Weak Oil & Gas, Strong O2C To Keep Earnings Stable

Reliance Industries Ltd is expected to report a largely stable set of consolidated numbers for Q3FY26 on a quarter-on-quarter basis, with modest growth across revenue, operating profit and net earnings. Analysts do not expect any major surprises in the quarter, with performance driven by steady execution in core segments and selective tailwinds in oil-to-chemicals and retail.

The oil-to-telecom conglomerate's October-December quarter revenue is expected to rise 1% on a sequential basis. Ebitda is expected to increase 4.6% to Rs 47,997 crore compared with Rs 45,885 crore in the previous quarter, supported by better operating performance in key businesses. Operating margin is projected to improve to 18.7% from 18%. While net profit is projected to grow 6% sequentially to Rs 19,271 crore from Rs 18,165 crore.

RIL is scheduled to announce the Q2 results on Friday, Jan. 16.

Besides the headline numbers, the street will closely monitor Reliance’s crude sourcing strategy, margin outlook in refining and petrochemicals, and signs of a pickup in retail growth during the festive season. Investors will also look for updates on the new energy business, commentary on potential tariff hikes ahead of the Jio IPO, progress in Jio Fiber, and guidance on capital expenditure plans and debt levels.

• Revenue seen up 1% at Rs 257038 crore vs Rs 254623 crore.

• Ebitda seen up 4.6% to Rs 47997 crore vs Rs 45885 crore.

• Ebitda Margin seen at 18.7% vs 18%.

• Net profit seen up 6% at Rs 19271 crore vs Rs 18165 crore.

Segment-wise, the retail business is expected to deliver steady growth. Retail revenue is estimated to rise 2.8% quarter on quarter to Rs 93,060 crore from Rs 90,544 crore, while retail Ebitda is seen increasing 9.3% to Rs 7,448 crore from Rs 6,817 crore.

However, on a year-on-year basis, Ebitda growth in retail is expected to remain weak due to a high base. This is also influenced by losses in JioMart Quick Commerce and the demerger of Reliance Consumer Products.

The festive season impact has been split between second quarter and third quarter this year, compared with being concentrated in third quarter last financial year, further affecting comparability.

In addition, the demerger of Reliance Consumer Products and reduced retail selling prices of products following the GST rate cut are each expected to have a 2% impact on retail topline.

The oil-to-chemicals (O2C) segment is expected to be one of the brighter spots in the quarter. O2C Ebitda is projected to rise 6.5% quarter on quarter to Rs 15,980 crore from Rs 15,008 crore, marking the highest sequential jump in the last four quarters.

Growth is likely to be driven by better refining margins and the benefit of a weaker rupee, partly offset by continued weakness in the petrochemicals business.

In contrast, the oil and gas exploration segment is expected to see a sharp decline. Ebitda from this business is projected to fall 12% quarter on quarter to Rs 4,388 crore from Rs 5,002 crore, representing the biggest drop in the last 15 quarters. The decline is attributed to lower realisations and volumes during the quarter.

• Revenue seen up 2.7% to Rs 32733 crore vs Rs 31,857 crore.

• Ebitda seen up 3.4% to Rs 17867 crore vs Rs 17,275 crore.

• Ebitda Margin seen at 54.6% vs 54.2%.

• Net profit seen up 1.8% to Rs 7095 crore versus Rs 6972 crore.

• ARPU seen up 0.8% at Rs 213 vs Rs 211 – growth slowest in last six quarters.

• Subscribers seen at 51.4 crore versus 50.64 crore.

Average revenue per user is seen inching up to Rs 213 from Rs 211, marking the sixth consecutive quarter of ARPU growth. However, the pace of growth is the slowest in the last six quarters as the impact of earlier tariff hikes starts to taper off.

ARPU growth continues to be driven by customer upgradation and higher data consumption. Subscriber numbers are expected to rise to 51.4 crore from 50.64 crore, with overall growth aided by strong additions in the broadband segment.