Reliance Industries Stock Analysis

Consolidated revenue grew 10.5% YoY to Rs 269,496 crore, with ~4% sequential growth, indicating broad-based demand momentum. / Consolidated EBITDA increased 6.1% YoY to Rs 50,932 crore, supported by strong O2C and Jio contribution. / Jio delivered strong operating quality: revenue up 12.7% YoY to Rs 37,262 crore with high EBITDA margin of 51.8% and PAT of Rs 7,629 crore. / O2C profitability improved materially, with segment EBITDA up 14.6% YoY to Rs 16,507 crore on stronger transportation fuel cracks and sulphur realisation. / Capex discipline is visible as Rs 33,826 crore investment was fully covered by Rs 41,303 crore cash profit, while debt-to-equity remained around 0.4x.

Consolidated PAT rose only ~1% YoY (Rs 18,645 crore vs Rs 18,540 crore) despite stronger revenue and EBITDA, suggesting limited near-term earnings leverage. / Retail margin pressure is evident: Retail EBITDA rose just 1.3% YoY to Rs 6,915 crore versus 8.1% revenue growth to Rs 97,600 crore, with margin at 8.0%. / Oil & Gas remains weak, with segment revenue declining 8.4% YoY to Rs 5,833 crore due to lower KGD6 gas/condensate volumes and realizations. / O2C improvement is partly offset by weakness in downstream chemical margins, leaving sensitivity to commodity-cycle volatility. / Large ongoing capex (Rs 33,826 crore in the quarter) toward O2C/New Energy and Jio/Retail infrastructure can keep near-term free cash flexibility tighter if returns are delayed.

O2C segment EBITDA surged 14.6% YoY to Rs 16,507 crore, driven by higher transportation fuel cracks and sulphur realisation, demonstrating refining competitive advantage / Jio delivered Rs 19,303 crore EBITDA at an industry-leading 51.8% margin with 12.7% revenue growth and 34% YoY data traffic increase to 62.3 billion GB, confirming digital services as a high-quality earnings engine / Cash profit of Rs 41,303 crore comfortably covers capex of Rs 33,826 crore (1.22x coverage ratio), ensuring self-funded growth without incremental leverage / Reliance Retail crossed 500 million transactions (up 47.6% YoY) with registered customers at 378 million and 431 new store openings taking the network to 19,979 stores, building massive scale advantages / Debt-to-equity remains conservative at ~0.4x despite heavy capex investments across O2C, New Energy, Jio, and Retail infrastructure / Diversified revenue model with no single segment exceeding 60% of revenue reduces cyclical vulnerability — O2C, Jio, and Retail each contribute meaningfully to consolidated EBITDA

Net profit grew only ~1% YoY despite 10.5% revenue growth and 6.1% EBITDA growth, indicating significant below-EBITDA drags from depreciation, interest costs, or tax rate increases tied to the Rs 33,826 crore capex program / Reliance Retail EBITDA margin compressed with only 1.3% EBITDA growth against 8.1% revenue growth and 47.6% transaction growth, suggesting heavy discounting or cost inflation eroding unit economics / Oil & Gas segment revenue declined 8.4% YoY to Rs 5,833 crore due to lower KGD6 gas volumes and price realisation, indicating production maturity in existing fields / Downstream chemical margins remained weak within O2C, partially offsetting the transportation fuel crack gains and introducing commodity cycle risk to the largest revenue segment / At trailing P/E of ~24x with only ~1% net profit growth, valuation leaves limited margin of safety if growth catalysts like New Energy or Jio tariff hikes do not materialize on schedule / Heavy capex of Rs 33,826 crore per quarter (~Rs 1.35 lakh crore annualized) in New Energy and infrastructure creates execution risk and will pressure free cash flow until these projects generate returns

Strong revenue growth from operations, up 10.5% YoY to Rs 269,496 crore. / Robust financial health with Debt-to-Equity ratio at ~0.4x and capital expenditure (Rs 33,826 crore) fully covered by cash profit (Rs 41,303 crore). / Exceptional performance in Jio with operating revenues up 12.7% YoY and total data traffic up 34% YoY to 62.3 billion GB. / Significant expansion in Reliance Retail, with 431 new store openings and transactions crossing 500 million, up 47.6% YoY. / Strong O2C segment EBITDA growth of 14.6% YoY (to Rs 16,507 crore), driven by transportation fuel cracks. / Diversified business model and strategic investments in New Energy and network infrastructure for Jio and Retail.

Significantly muted Net Profit growth of only ~1% YoY (to Rs 18,645 crore) despite strong revenue and EBITDA growth. / Weakness in downstream chemical margins partially offset O2C segment gains. / Oil & Gas segment revenue declined 8.4% YoY (to Rs 5,833 crore) due to lower volumes and price realisation. / Exposure to commodity price volatility, particularly in the O2C and Oil & Gas segments.