Reliance Q2 Profit Jumps 41% to Rs 25,548 Crore as Refining Carries the Quarter and Retail Profit Falls 24%

Reliance Industries reported a 41% year-on-year rise in consolidated net profit attributable to shareholders for the July-September quarter, at Rs 25,548 crore against Rs 18,165 crore a year earlier. The numbers, filed with the exchanges after trading hours on Friday, also mark a 22% jump from the June quarter's Rs 20,946 crore.

Revenue from operations climbed 28.5% to about Rs 3.33 lakh crore. But the headline growth hides a business pulling in two directions: the refining and petrochemicals arm had one of its strongest quarters in years, while the retail arm went backwards on profit.

Oil-to-chemicals did the heavy lifting

The oil-to-chemicals (O2C) segment's revenue rose 44% to Rs 2,31,601 crore, and its segment EBITDA surged 68% to Rs 25,203 crore from Rs 15,008 crore. Reliance said average crude prices in the quarter were about 41% higher than a year earlier, while transport fuel prices rose 50% to 78% and most downstream chemical prices gained 25% to 35%.

Tight global fuel markets and wider product spreads let Reliance's export-oriented refineries capture more margin, and the company said its ability to switch crude sources helped it take advantage of the disruption in West Asian supply. Higher logistics costs and the special additional excise duty on fuel clawed back part of the gain.

That one segment now accounts for nearly half of the group's operating profit, which matters for how investors read the quarter. Fuel cracks driven by a war in the Gulf are not a durable earnings base, and a peace deal or a reopening of shipping lanes could reverse them quickly.

Margins: better than June, not better than last year

Consolidated operating margin came in at about 17%, a clear improvement on the June quarter's 15.4%. It was still slightly below the 17.8% posted a year ago, because revenue inflated by high oil prices grew faster than profit in the lower-margin fuel business.

Jio steady in its first quarter as a listed company

Digital services segment EBITDA rose about 18% to Rs 22,223 crore. Jio Platforms, which listed on the exchanges earlier this week, reported net profit of Rs 8,389 crore, up about 14%, on revenue of Rs 40,475 crore, up 11%.

Average revenue per user rose to Rs 218.8 a month from Rs 211.4 a year earlier. The subscriber base reached 542.4 million, including 300 million on 5G, with 9.1 million net additions in the quarter. Promotional offers on home broadband held back faster ARPU growth.

Retail is the weak spot

Reliance Retail Ventures' profit fell 24.3% to Rs 2,611 crore, even as revenue from operations rose 5.8% to Rs 80,220 crore. Retail EBITDA dropped 11% to Rs 5,886 crore, and finance costs jumped 54% to Rs 905 crore.

The quarter included a Rs 108 crore impairment for shutting the 7-Eleven convenience stores. The chain opened 303 outlets but closed more, ending with 19,947 stores after a net reduction of 222. The consumer brands business was a bright spot: beverages led by Campa crossed Rs 5,250 crore of sales in the first half alone. Management also pointed out that the festive season falls entirely in the December quarter this year.

What to watch

Reliance shares will react to the numbers on Monday, November 2. The key question for the stock is how much of this quarter's profit is repeatable once fuel markets normalise, and whether retail can return to profit growth once store rationalisation ends. Indian Oil's record quarterly profit, also reported on Friday, showed the same refining tailwind across the sector, which suggests the O2C boost reflects market conditions rather than anything unique to Reliance.

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