Reliance Industries reported a 13 per cent year-on-year decline in its consolidated net profit at Rs 16,971 crore for Q4 FY26, highlighting pressure on overall profitability as the global energy crisis weighed on its core oil-to-chemicals business, offsetting gains in its consumer-facing telecom and retail segments.
The brokerage firm, Morgan Stanley, maintains an overweight rating on Reliance Industries with a target price of Rs 1,803. Here’s why:
Reliance Industries Q4 results
Reliance Industries reported a 13 per cent year-on-year decline in its consolidated net profit at Rs 16,971 crore for Q4 FY26, highlighting pressure on overall profitability as the global energy crisis weighed on its core oil-to-chemicals business, offsetting gains in its consumer-facing telecom and retail segments. On a sequential basis, profit fell 9 per cent from Rs 18,645 crore in the preceding October-December quarter.
The oil-to-chemicals (O2C) business, which contributes the lion’s share of revenue to the country’s most valuable company, was impacted by the war in West Asia, which triggered a sharp rise in crude oil prices and elevated freight, insurance, and fuel costs.
The government’s reintroduction of a windfall tax on fuel exports further weighed on margins, while the company was compelled to divert valuable feedstock from petrochemical production towards manufacturing cooking gas (LPG) to help manage domestic energy disruptions.
Profitability was also hit by a move from state-run fuel retailers to cap margins on petrol and diesel purchases from Reliance, as they sought to offset losses from a freeze in retail fuel prices. To remain competitive, Reliance similarly refrained from raising pump prices in line with the surge in crude oil costs, further pressuring margins.
The weakness in the oil-to-chemicals (O2C) business offset double-digit revenue growth in the telecom and retail segments. The telecom business saw earnings grow from a higher subscriber base, as well as increased per-user earnings, while the hyperlocal segment of retail saw handsome order bookings.
Despite the drop in profit, the oil-to-telecom conglomerate posted a 13 per cent YoY rise in its consolidated revenue from operations to Rs 2.94 lakh crore, indicating resilient top-line growth. It stood at Rs 2.61 lakh crore in the same quarter of the previous financial year.
For the full year, Reliance posted record high revenue of Rs 11.75 lakh crore and an all-time high EBITDA of Rs 2.07 lakh crore.
Reliance Industries has announced a dividend for its investors alongside its quarterly results. The company has declared a dividend of Rs 6 per share for its investors.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
