Reliance’s Q1 profit missed last year’s number, but still beat what analysts expected

Reliance Industries reported quarterly net profit of Rs 23,196 crore on Friday, a 25% decline from the same quarter last year, yet the figure comfortably beat analysts’ average estimate of Rs 18,550 crore. The gap between the year-on-year decline and the beat against forecasts came down to a one-off item: a year earlier, Reliance had booked a Rs 8,924 crore gain from selling a stake in Asian Paints, a windfall that simply did not recur this quarter.

Set against that one-time comparison, the operating numbers moved in the opposite direction. Revenue rose 25% to Rs 3.1 lakh crore, and Ebitda climbed 10% to Rs 51,403 crore, lifted by strong performances at the oil-to-chemicals (O2C) business and Jio’s digital services. Expenses also rose, up 27% to Rs 2.9 lakh crore, as costs kept pace with the higher revenue base.

Chairman and managing director Mukesh Ambani described the quarter as a steady start to the financial year. “Reliance has made a steady start to FY27, with all businesses delivering strong operating performance despite continuing geopolitical tensions and volatile commodity markets. This makes me optimistic about the year ahead as we advance our new energy projects and the Jio IPO,” he said.

The O2C division contributed 33% of total operating profit, with Ebitda up 17% year-on-year to Rs 17,010 crore on the back of stronger transportation fuel and downstream margins, higher crude sourcing from Russia and Latin America, and lower-cost ethane feedstock. That was partly offset by higher crude, freight and insurance costs, losses from holding domestic fuel prices steady, and the reintroduction of a special additional excise duty on diesel, petrol and aviation fuel.

Jio’s Ebitda rose 16% to Rs 21,255 crore, with average revenue per user up 3% to Rs 216 on a better subscriber mix and seasonal gains, partly offset by broadband promotions. The telecom operator had 533 million subscribers as of June 30 — the world’s second-largest by that measure — with data traffic up 27% and voice traffic up 2%. Retail Ebitda was roughly flat at Rs 6,309 crore even as revenue grew 8%, while oil and gas Ebitda held steady at Rs 4,973 crore.

Reliance ended the quarter with cash of Rs 2.46 lakh crore against net debt of Rs 1.22 lakh crore, and capital expenditure of Rs 38,682 crore that went partly toward its green energy build-out and consumer business expansion.

Wikimedia Commons/by World Economic Forum