RIL misses Street's profit estimates

Retail, upstream weakness offsets O2C gains

- RAGHAVENDRA KAMATH & KISHOR KADAM

RELIANCE INDUSTRIES (RIL) on Friday reported a consolidated net profit of ₹18,645 crore for the October-December quarter, up 0.6% year-on-year but below the Bloomberg estimate of ₹19,896 crore as higher costs and weaker earnings from retail and the oil and gas business offset strength in its oil-to-chemicals operations.

Revenue from operations rose 10.5% year-on-year to ₹2.69 lakh crore, beating estimate of ₹2.58 lakh crore.

Earnings before interest, tax, depreciation and amortisation (Ebitda) rose around 6% year-on-year to ₹46,018 crore, but also missed the estimate of ₹47,888 crore. The miss at the profit level was driven less by operating weakness and more by a sharp rise in depreciation, finance costs and taxes, alongside limited incremental profit contribution from retail and a decline in upstream earnings.

Depreciation increased nearly 11% year-on-year to ₹14,622 crore, reflecting capitalisation of investments across businesses. Finance costs rose 7% to ₹6,613 crore, largely due to the operationalisation of spectrum and other large assets, while tax expenses climbed over 10% to ₹7,530 crore, compressing the translation of operating gains into net profit.