Reliance Industries shares slip by 1% after profit decline in Q2

Reliance Industries Ltd (RIL), one of India’s largest and most valuable company, saw its shares dip more than 1% in early trade on Tuesday following a disappointing quarterly earnings report. The company revealed a 5% drop in net profit for the July-September period, mainly due to a weaker performance in its oil refining and petrochemical divisions, a PTI report said.

By mid-morning, Reliance’s stock had slipped 1.15% to Rs 2,713.55 on the Bombay Stock Exchange (BSE), while on the National Stock Exchange (NSE), it fell 1.13% to Rs 2,713.80.

The company’s consolidated net profit for the second quarter of the financial year stood at Rs 16,563 crore, or Rs 24.48 per share, down from Rs 17,394 crore (Rs 25.71 per share) during the same period last year. The oil-to-chemical (O2C) division, which includes Reliance’s refining operations in Jamnagar, Gujarat, was particularly impacted by shrinking margins. This decline came as a result of global oversupply, driven largely by China, which has been flooding the market with petroleum products refined from inexpensive Russian crude oil.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also saw a modest dip, dropping 2% to Rs 43,934 crore. Rising finance costs, up 5% to Rs 6,017 crore, due to increased debt, along with a 2.3% rise in depreciation, further weighed on the company’s bottom line.

Despite the struggles in its oil business, Reliance’s other key segments—retail and telecommunications—continued to perform steadily, providing some stability to the company’s overall financial health.

As the company navigates the challenges posed by a volatile global energy market, investors are closely watching how Reliance Industries will balance its core O2C operations with the consistent growth of its retail and telecom businesses.

(With PTI inputs)