Reliance Industries Ltd (RIL) is poised to announce its financial results for the second quarter of FY26 today, October 17, 2023. Analysts anticipate a robust performance from its key segments, including the telecommunications division, Jio, and the oil-to-chemicals (O2C) sector. Investors are particularly keen to learn about developments in the company’s emerging energy business, plans for the Jio initial public offering (IPO), and ongoing retail expansion.
Analysts predict that Reliance will achieve double-digit growth in both revenue and profit compared to the previous year. According to a report from Motilal Oswal Financial Services, the company’s consolidated revenue is expected to increase by 6.5% year-on-year (YoY), reaching approximately Rs. 2.46 lakh crore. Meanwhile, adjusted net profit could rise by 22% YoY to around Rs. 20,200 crore. The brokerage also forecasts that EBITDA will grow by 17% YoY to Rs. 45,800 crore, with margins improving to 18.6%, up from 16.9% last year. In a more optimistic assessment, Kotak Institutional Equities projects an 11.3% increase in revenue and a 10.3% rise in adjusted profit after tax (PAT).
Sector Contributions and Outlook
The oil-to-chemicals (O2C) segment is expected to be a major driver of revenue, benefitting from improved refining margins and increased throughput. Analysts predict that EBITDA for this sector could rise nearly 20% YoY, despite low petrochemical spreads. The telecommunications division, Reliance Jio, is anticipated to deliver stable growth with an EBITDA increase of 14-17%. The average revenue per user (ARPU) is expected to see a slight uptick to Rs. 211-212, alongside the addition of more than 5 million new subscribers. The potential IPO of Jio in 2026 is viewed as a significant catalyst for future growth.
In contrast, the retail sector is expected to see an EBITDA growth of 11-15%, fueled by network expansion and increased festive demand. However, analysts caution that a larger base and cautious consumer spending may present challenges. The oil and gas segment, on the other hand, may experience subdued performance, with EBITDA projected at around Rs. 4,900 crore due to lower gas production and weak pricing.
Investors’ Focus Areas
Beyond financial metrics, investors will be keenly watching for insights from management on several key strategic initiatives. Updates on the Rs. 75,000 crore new energy initiatives, which encompass solar, hydrogen, and battery storage projects, will be critical. Additionally, progress on the Jio IPO and the potential demerger of the consumer business are of significant interest.
Analysts will also be looking for information on cash flow trends and capital expenditure outlook, as there is caution regarding high spending cycles. Performance updates regarding the retail network and premium format stores will further inform investor sentiment.
Despite a recent decline in RIL shares, which have fallen nearly 6%, leading to a loss of approximately Rs. 1.8 lakh crore in market capitalization, analysts maintain a moderately optimistic outlook. They highlight Reliance’s diverse growth avenues across energy, telecommunications, retail, and new energy sectors.
“The next six months will be crucial in shaping Reliance’s transformation into a clean energy and consumer-tech giant,” stated Saurabh Jain, a market analyst at SMC Global Securities. As investors await the company’s results, the focus remains on how Reliance will navigate its ambitious growth trajectory amidst evolving market conditions.
