Reliance Industries set for double-digit profit growth as O2C rebounds
Reliance Industries is expected to report double-digit profit growth for the June quarter, offering investors a sign of whether a recovery in its core energy business can offset persistent weakness in retail.
Reliance Industries shares gained as much as 2.4% to ₹1,323.80 on Friday as the Indian conglomerate prepares to release its first-quarter earnings after market close. The intraday advance offers a brief reprieve for a stock that has shed nearly 11% of its value over the past year, reflecting broader investor caution toward the company's recent trajectory.
Brokerages project a notable rebound in profitability driven primarily by the company's oil-to-chemicals (O2C) division. Equirus Securities forecasts consolidated net sales will jump 35% year-on-year to ₹3.28 trillion, while net profit is expected to climb 13% to ₹24,593 crore. Rival firm Systematix Institutional Equities offered a more conservative estimate, projecting a 27% increase in revenue.
The divergent performance across Reliance's sprawling operations remains the focal point for market participants. Stronger refining margins and improving petrochemical spreads are anticipated to lift the O2C segment, providing a critical tailwind for the overall bottom line. "Growth will be led by improving O2C profitability, low-double-digit growth in Retail, and continued momentum in Jio through ARPU gains and subscriber additions," said Equirus Securities.
The digital unit, Jio, is expected to provide steady support through higher average revenue per user metrics. However, the broader consumer environment continues to drag on the retail arm, which faces continued pressure from subdued consumption trends. Furthermore, lower production volumes from the KG-D6 block are expected to act as a headwind for the upstream oil and gas exploration business, limiting overall upside.
Despite the projected top-line expansion, analysts warn that underlying profitability metrics are likely to face compression. Equirus expects EBITDA to reach ₹49,100 crore, up 14.5%, but notes that margins are forecast to contract by 267 basis points year-on-year to 15%. Systematix projects a more modest 9.9% increase in EBITDA to ₹47,100 crore, leaving investors to weigh whether the energy recovery can offset structural pressures in retail.
