reliance industries q2 results

singluar Friday, October 17, 2025

Reliance Industries Q2: A Mixed Bag with Structural Momentum

Reliance Industries Limited (RIL), the sprawling conglomerate led by Mukesh Ambani, remains one of India’s most closely watched corporate names. Its second quarter (Q2) results always attract keen scrutiny—not just for its oil & petrochemicals business, but for how its newer arms (digital, retail, energy) are shaping the next leg of growth. The most recent Q2 showed both strengths and headwinds: while the company delivered year-on-year profit growth, certain legacy segments underperformed and analysts expressed caution about margins and cyclical pressures.

Key Numbers at a Glance

Consolidated Net Profit: ₹18,165 crore in Q2 FY26, up ~10% YoY.
Revenue from Operations: ~₹2.59 trillion, exceeding many analyst estimates.
Though the overall profit rose, it missed street expectations of ~₹22,731 crore.
The oil-to-chemicals (O2C) business’s margins came under pressure, especially in downstream chemicals and polyester.
Notably robust growth was seen in retail (driven by hyperlocal and digital commerce) and digital services (Jio) segments.
Within its media arm, JioStar reported net profit of ₹1,322 crore, with EBITDA margins of ~28.1%.

Together, these figures paint a nuanced picture: Reliance is still delivering across many fronts, but its core legacy business is under strain from global macro and trade pressures.

Segmental Performance: What Mattered

Oil‑to‑Chemicals (O2C): The Legacy Segment Under Strain

The O2C division has long been the economic engine of Reliance. But in this quarter, it faced significant headwinds:

Declining downstream chemical margins: Oversupply and volatility in input costs have squeezed margins in segments like polymers and intermediates.
Polyester segment weakness: Global textile slowdowns and tariff disruptions have dampened offtake and pricing.
While revenue did show growth in this segment (3.2% YoY), profitability was contained by margin erosion.

Thus, though the top line held up, the value extraction from this segment was dampened.

Retail & E‑Commerce: A Bright Spot in the Mix

Reliance’s retail arm continues to be a key driver of growth and diversification:

Hyperlocal & quick commerce: JioMart’s “quick delivery” model saw 200%+ YoY growth in average daily orders.
The arm added 5.8 million new users during the quarter, marking strong customer acquisition momentum.
All retail formats—grocery, fashion, electronics—contributed to this growth push.

The retail story is no longer a side-show; it is becoming an anchor in Reliance’s growth narrative.

Digital & Telecom (Jio): Steady Climb

Reliance’s digital arm, Jio, continues to expand and innovate:

Though Jio’s direct numbers weren’t the headliner in the earnings release, the broader “digital services” bucket posted double-digit growth.
The company’s telecom-digital integration, platform expansion (e.g. broadband, new services), and data monetization continue to be central to valuation narratives.

Media & Entertainment (JioStar)

JioStar’s quarterly net profit stood at ₹1,322 crore.
Its margins (~28%) reflect capable performance in what is still a volatile sector.

Media remains a strategic play for Reliance, particularly as content and streaming enter a bold growth phase in India.

What Drove the Growth – And What Held It Back

Tailwinds

Diversification paying off: Reliance’s expansion beyond oil & chemicals to consumer services gives its earnings base resilience against cyclical swings.
Strong retail & digital momentum: The push into quick commerce, omnichannel retail, and digital adoption is driving scale and brand loyalty.
Operational scale and integration: Reliance continues to benefit from synergies—e.g. leveraging its logistics, infrastructure, and captive resources across its verticals.

Headwinds & Risks

Margin compression in legacy business: Weakness in downstream chemicals and pressure in polyester remain big challenges.
Global commodity cycles & trade dynamics: Input costs, global oversupply, and tariff policies can swing profitability.
Execution risks in newer business lines: Expanding hyperlocal delivery, logistics, platform monetization, and media presence demand high CapEx and operational discipline.
Valuation expectations: When segments like O2C underperform relative to estimates, the market may penalize expectations for the growth legs.

Investor Takeaways & Market Reaction

Following the Q2 results, markets responded with caution. Though profit rose, the miss relative to expectations and margin pressure in O2C tempered enthusiasm.

Analysts are likely to re-examine their projections, possibly trimming margin and EBITDA estimates for certain segments while reinforcing faith in the growth of consumer-facing divisions.

Importantly, the results reaffirm a longer-term thesis: Reliance is evolving from a traditional energy-petrochemicals conglomerate into a “platform + infrastructure + consumer” juggernaut. The speed and success of that transition will be critical.

What to Watch in Coming Quarters

Whether the next quarters see margin recovery in O2C (especially petrochemicals) as global cycles normalize.
Execution on scaling hyperlocal deliveries, improving unit economics in quick commerce, and enhancing supply chains.
Monetization of digital platforms beyond connectivity: content, IoT, enterprise solutions.
Any further listings or spin-offs of Jio, Retail, or other verticals (a structural lever for unlocking valuation).
Macro inputs: crude price trends, supply/demand in global chemicals, trade policies, and currency fluctuations.

Conclusion

Reliance’s Q2 results reflect a company in transition. While legacy businesses are under pressure, the growth engines—retail, digital, media—are steadily taking on larger roles. The 10% YoY advance in profit is encouraging, but misses against high expectations remind us of the challenges inherent in such a structural pivot.

For investors, the key is balance: remain vigilant on cyclical volatility, but maintain conviction in Reliance’s long-term strategic reorientation. The next several quarters will test how far and fast this transformation can take hold—and whether that narrative can exceed the sum of its parts.