RIL Q2 Results: Key Highlights from the Earnings Report

Reliance Industries Ltd (RIL) saw its profits fall in the second quarter, primarily due to weak performance in its oil-to-chemicals (O2C) business. However, the results were generally in line with analyst expectations, who predicted a decline in profits and poor O2C performance. Here are five key takeaways from RIL’s earnings report:

Core Earnings Surpassed Expectations

The company reported a consolidated net profit of ₹16,563 crore, down 5% from last year. However, this was better than the estimated ₹15,716 crore. Analysts had anticipated a profit drop of up to 10%, but the results exceeded their forecasts. Revenue from operations increased by 0.2% year-on-year to ₹2.35 lakh crore, supported by strong performance in upstream and digital businesses despite weak O2C and retail segments.

O2C Business Remains Weak

The oil-to-chemicals segment continued to struggle, with operating profit down 23% year-on-year. This decline was mainly due to unfavorable demand-supply conditions, which caused a sharp 50% drop in transportation fuel cracks and ongoing weakness in downstream chemical pricing. Despite this, segment revenue increased by 5% year-on-year to ₹1.55 lakh crore, thanks to higher volumes and increased domestic sales.

Retail Performance Was Muted

The retail sector had a lackluster quarter, with revenues declining 1% to ₹76,302 crore due to weak demand for fashion and lifestyle products. The company focused on streamlining operations and a cautious approach to its B2B business to improve profit margins. Profit and EBITDA growth were minimal, at just 1% and 0.3%, respectively.

Jio Drives Growth

Jio Platforms, Reliance’s digital services division, reported strong performance with a 7% year-on-year increase in average revenue per user (ARPU). Net profit for this segment grew by 23% year-on-year to ₹6,539 crore, while revenues rose 18% to ₹37,119 crore.

New Energy Developments

RIL announced that the first of its new energy giga-factories is on track to start producing solar PV modules by the end of this year. Chairman Mukesh Ambani stated that with a wide range of renewable solutions—including solar, energy storage systems, green hydrogen, bio-energy, and wind—this new energy business is expected to significantly contribute to the global clean energy transition.