Reliance Q2 results came in big, and the refinery did most of the lifting. Reliance Industries reported consolidated net profit attributable to shareholders of ₹25,548 crore for the July-September quarter, up about 41% from ₹18,165 crore a year ago, as a surge in global refining margins turned its oil-to-chemicals (O2C) arm into the star of the quarter.
In this article
Reliance Q2 results: the headline numbers
Revenue from operations rose 29% to ₹3.32 lakh crore from ₹2.58 lakh crore a year earlier, The Economic Times reported. Against the June quarter, profit was up 27% from ₹23,196 crore and revenue up 6%. Livemint put consolidated EBITDA for the quarter at ₹62,409 crore.
The board also cleared an enabling resolution to raise up to ₹15,000 crore through non-convertible debentures on a private placement basis, in one or more tranches.
O2C: a record quarter from refining
This is where the story sits. O2C EBITDA jumped 68% year-on-year to a record ₹25,203 crore from ₹15,008 crore, and segment revenue climbed 44% to ₹2.31 lakh crore. The segment’s EBITDA margin widened to 10.9% from 9.3%, per ET.
The reason is simple enough: fuel cracks (the gap between product prices and crude cost) exploded. Reliance said supply disruptions in the Middle East and Russia pushed refining margins sharply higher. Diesel cracks rose 252% year-on-year to $65.8 a barrel, jet fuel cracks 268% to $59.3, and gasoline cracks nearly tripled to $24.9. Refinery throughput recovered to 20.6 million tonnes from 18.1 million tonnes in the June quarter, which had planned maintenance. Higher freight, crude premiums and under-recoveries in domestic fuel retail took some of the shine off.
Jio steady, retail and JioStar softer
Jio Platforms, in its first results since listing on October 28, posted profit after tax of ₹8,387 crore, up 14%, on revenue of ₹40,475 crore, up 11.4%. It added 91 lakh subscribers to reach 54.24 crore, and ARPU (average revenue per user) improved to ₹218.8 a month from ₹211.4 a year ago.
Retail was the weak spot. Livemint reported Reliance Retail Ventures’ net revenue up 6.4% to ₹91,716 crore, but net profit fell to ₹2,611 crore from ₹3,469 crore. JioStar grew revenue 10% to ₹6,806 crore, yet its profit after tax slipped 13% to ₹1,147 crore as the ad market stayed weak. Oil and gas EBITDA eased 2% to ₹4,901 crore on lower KG-D6 output and gas prices.
What it means for the stock
The balance sheet got lighter. Net debt fell to ₹1.17 lakh crore from ₹1.22 lakh crore in June, and capex for the quarter was ₹38,153 crore, ET said. The shares closed 0.44% higher at ₹1,163.55 on BSE on Friday, according to Livemint. The results landed in the evening, so Monday, November 2 is the first session where the market can price them in.
We would keep one thing in mind. A record O2C quarter built on war-driven crack spreads is not something to extrapolate. If refining margins cool, the earnings mix leans back towards Jio and retail, and retail has just had a soft quarter. For more context on the telecom arm, see our Jio Platforms listing coverage, and for another big result from the same evening, our note on Bank of Baroda Q2 results.
Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making any investment decision.
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