Reliance Slips as Profit Falls and Iran War Weighs

Shares of Reliance Industries edged lower in early trade after the oil-to-telecom major reported a weaker-than-expected set of March-quarter earnings, as rising costs and pressure in its core energy business weighed on profitability.

The stock reaction followed a miss on Street estimates, with the company posting a decline in net profit despite healthy revenue growth. Consolidated net profit fell about 13% year-on-year to ₹16,971 crore, while revenue from operations rose roughly 13% to ₹2.98 lakh crore, highlighting a divergence between top-line expansion and margin pressures.

Profit came in below analysts’ expectations, underscoring the impact of cost escalation during the quarter.

At the time of writing, the stock had managed to post gains and was up 0.68 percent at Rs 1,336.80. Source: NSE

The key drag remained the oil-to-chemicals (O2C) segment — a crucial earnings driver — where margins were hit by higher feedstock costs and global supply disruptions. Core refining earnings slipped, as the company grappled with elevated crude prices and logistical challenges stemming from geopolitical tensions in the Middle East.

Material costs surged sharply, rising nearly 20% to ₹1.29 lakh crore, further squeezing margins. The company had to source crude from alternative markets such as Russia, Venezuela and Brazil amid disruptions in traditional supply chains, adding to cost pressures.

That said, the weakness in the energy vertical was partly cushioned by steady growth in consumer-facing businesses. Telecom arm Jio Platforms continued to deliver robust performance, with profit rising around 13% year-on-year to ₹7,935 crore, supported by subscriber additions and improved average revenue per user (ARPU).

Retail also remained resilient, though growth moderated. Reliance Retail posted a marginal increase in profit to about ₹3,563 crore, even as revenue rose in double digits, indicating stable demand but some pressure on margins.

Market participants appeared unimpressed by the mixed earnings profile, with the miss on profitability overshadowing the strong top-line and consumer business momentum. The stock has already been under pressure this year, with declines outpacing the broader market amid concerns over energy margins and global volatility.

Going ahead, investors are likely to closely track commentary on refining margins, crude sourcing strategies and any updates on potential listings of Jio Platforms. While the consumer businesses continue to provide a cushion, the near-term trajectory of the stock may remain tied to how quickly pressure in the core energy segment eases.

Source:

• https://www.nseindia.com/get-quote/equity/RELIANCE/Reliance-Industries-Limited