Reliance profit falls 25%: why Ambani still calls it a ‘steady start’

Reliance Industries, India’s most valuable company by market capitalisation, posted a 25% drop in consolidated quarterly profit to Rs 23,196 crore for the April-June period of FY27, the company announced on Friday. Despite the fall, the figure beat analysts’ average estimate of Rs 18,550 crore, a gap the company attributed largely to how last year’s numbers were built up rather than any weakness in the current quarter.

The year-on-year decline stems mainly from a one-off gain of Rs 8,924 crore that Reliance booked in the same quarter last year from selling its stake in Asian Paints, a gain that had no repeat this time around. Strip that out, and the underlying business told a very different story: revenue rose 25% to Rs 3.1 lakh crore, driven by strong performances at the oil-to-chemicals (O2C) arm and the Jio digital services business. Ebitda climbed 10% to Rs 51,403 crore, even as total expenses rose faster, up 27% to Rs 2.9 lakh crore.

‘Reliance has made a steady start to FY27, with all businesses delivering strong operating performance despite continuing geopolitical tensions and volatile commodity markets. This makes me optimistic about the year ahead as we advance our new energy projects and the Jio IPO,’ said Mukesh Ambani, chairman and managing director of Reliance Industries.

Jio, the group’s telecom arm, posted a 16% rise in ebitda to Rs 21,255 crore, supported by strong revenue growth and a 150-basis-point improvement in margins. Average revenue per user rose 3% to Rs 216, helped by a better subscriber mix and seasonal gains, though broadband promotions partly offset the increase. Launched in 2016, Jio counted 533 million customers as of 30 June, making it the world’s second-largest telecom operator by subscriber count; data traffic grew 27% and voice traffic 2% over the quarter.

On the balance sheet, Reliance’s cash balance of Rs 2.46 lakh crore comfortably covered its net debt of Rs 1.22 lakh crore. The company’s capital expenditure for the quarter totalled Rs 38,682 crore, funding in part its green energy build-out and the expansion of its consumer products business.

Image: Wikimedia Commons/by World Economic Forum