Reliance Industries shares surged nearly 8% on Monday, driven by the company’s record-breaking Q2FY27 financial performance. The consolidated net profit climbed 33.8% year-on-year to a historic high of ₹29,550 crore. This stellar performance was further showed by a 24% increase in EBITDA to a record ₹62,409 crore, fueled by robust growth across its oil-to-chemicals (O2C), digital services, and retail businesses.
By 12 pm, the stock traded at ₹1,256.80 on the NSE, after reaching ₹1,259, up from its previous close of ₹1,164.90. The July-September quarter saw consolidated revenue jump 28% year-on-year to an all-time high of ₹3.62 lakh crore. The results drew positive responses from brokerages like Jefferies, Kotak, JPMorgan, and Systematix Institutional Research, which highlighted the company’s strong refining and petrochemical profitability while noting concerns around retail margins.
O2C Business Fuels Record Earnings
Reliance’s oil-to-chemicals (O2C) segment led the charge. Revenue from this division rose 44.2% year-on-year to ₹2.32 lakh crore, while EBITDA soared 67.9% to ₹25,203 crore. Transportation fuel cracks, a key indicator of refining margins, surged three to 3.7 times from the previous year, reaching historic highs. Improved downstream petrochemical margins and favorable feedstock sourcing further bolstered earnings. Systematix Institutional Research noted that Reliance’s consolidated revenue and EBITDA grew 29.8% and 23.4% year-on-year, respectively, to ₹3.3 lakh crore and ₹56,600 crore, with adjusted profit after tax rising 41% to ₹25,500 crore.
Digital Services Grow, Retail Margins Under Pressure
Reliance’s digital services arm continued its upward trend. Jio Platforms recorded a 16.6% year-on-year EBITDA rise to ₹21,900 crore, with its EBITDA margin expanding 243 basis points to 54.1%. The subscriber base grew 7.1% to 542.4 million, while ARPU improved 3.5% to ₹218.8. Notably, Jio’s 5G subscriber base reached 300 million, and fixed broadband subscribers crossed 30 million.
In contrast, retail revenue grew modestly by 5.8% year-on-year to ₹80,200 crore, with EBITDA declining 11.1% to ₹6,100 crore. Jefferies noted that retail EBITDA missed its estimates by 6%, primarily due to investments in quick commerce and inflationary pressures. Systematix highlighted that planned investments in digital commerce, input-cost inflation, and a shift in the festive calendar weighed on retail margins.
Brokerages Maintain Positive Outlook
Systematix raised its FY27 and FY28 EBITDA estimates by 12.7% and 5.7%, respectively, citing stronger refining and petrochemical margins. Kotak emphasized growth opportunities from FMCG brands like Campa and Independence but flagged retail profitability as a concern.
Reliance’s net debt declined 4.7% sequentially to ₹1.2 lakh crore, with capital expenditure at ₹38,200 crore, directed towards O2C expansion, New Energy projects, and consumer business infrastructure. Brokerages anticipate earnings contributions from New Energy projects starting FY28, remaining optimistic about Reliance’s diversified model and long-term earnings visibility. Systematix expects New Energy projects to contribute to earnings from FY28, reinforcing its positive outlook on the company’s diversified business model and long-term growth prospects.
