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Reliance Industries Q2 results today: Can the old economy rescue the new Reliance?

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In short

The energy business is positioned as the primary catalyst for near-term growth, with consolidated quarterly EBITDA projected to rise between 15% and 17% year-on-year. Analysts at Kotak Securities project the oil-to-chemicals segment's EBITDA could jump as much as 47% compared to the previous year. Meanwhile, steady double-digit expansions in telecom operations help balance margin strains in the retail division that were induced by the RCPL demerger.

Key points

  • Legacy energy operations are driving the immediate financial recovery despite the company…: Legacy energy operations are driving the immediate financial recovery despite the company's broader transition into consumer and digital markets.
  • Reliance Retail faces short-term earnings headwinds from general margin pressures and str…: Reliance Retail faces short-term earnings headwinds from general margin pressures and structural impacts tied to the RCPL demerger.
  • Updates regarding the commissioning schedule of new energy projects remain a vital focus…: Updates regarding the commissioning schedule of new energy projects remain a vital focus area for assessing the group's long-term transformation.

Sources checked by our analysis pipeline: 1

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Brokerages expect consolidated EBITDA to rise roughly 15%–17% year-on-year, led by a strong rebound in O2C earnings. Jio Platforms is likely to maintain steady growth, but Reliance Retail may continue to face margin pressure. The result could therefore revive the energy engine but also reinforce questions about the pace of the group’s transition beyond oil and refining.

JPMorgan expects Reliance’s consolidated EBITDA to rise 16% year-on-year and 12% sequentially, with O2C EBITDA increasing 40% year-on-year and 24% sequentially. Kotak Securities estimates consolidated EBITDA growth of 15%, with O2C EBITDA rising 47% year-on-year and 29% sequentially.

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O2C expected to drive the quarter

The sharp improvement in Reliance’s energy earnings is expected to come from stronger refining cracks, improved petrochemical margins and higher volumes after maintenance at one of its crude distillation units in the previous quarter.Singapore gross refining margins rose sharply from the year earlier period, helped by stronger diesel, gasoline and aviation fuel spreads. Jefferies noted that…

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