Reliance Industries Q3 EBITDA Growth Sputters on Retail Slowdown
Overview
Reliance Industries (RIL) anticipates a slower 7-9% year-on-year EBITDA growth for Q3FY26, a dip from Q2's 15%. This moderation is primarily attributed to Reliance Retail's decelerating sales growth, impacted by a high base and shifting festival season. However, the Oil-to-Chemical (O2C) and Jio segments are projected to deliver robust double-digit EBITDA increases.
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RIL Faces Slower Q3 Growth
Reliance Industries (RIL) is poised for a tempered year-on-year EBITDA growth of 7-9% in the third quarter of fiscal year 2026. This figure marks a notable deceleration from the 15% growth recorded in the previous quarter. The primary driver behind this slowdown is expected to be Reliance Retail, which is seeing its growth moderate.
Retail Segment Decelerates
Reliance Retail's sales growth is projected to cool to approximately 10% year-on-year in Q3FY26, down from 21.3% in Q2FY26. Analysts attribute this moderation to a combination of a high comparative base, the shifting of the festive season, and ongoing retail demand trends. EBITDA for the retail arm is expected to see about a 6% year-on-year rise.
O2C and Jio Show Strength
In contrast, the Oil-to-Chemical (O2C) and Jio segments are anticipated to post strong double-digit year-on-year EBITDA growth. Goldman Sachs forecasts O2C EBITDA to rise 16% year-on-year, citing improved refining earnings that more than compensate for declines in petrochemicals. Strong refining margins are expected to persist due to tight global capacity and structural supply constraints.
Telecom Momentum Continues
Jio Infocomm is expected to add approximately 9.5 million subscribers in Q3FY26, contributing to a projected 12% year-on-year revenue growth (excluding fixed/enterprise). Kotak Institutional Equities forecasts Jio's EBITDA to increase by 15% year-on-year, with blended Average Revenue Per User (ARPU) reaching ₹214.
Brokerage Outlook
Brokerages like Morgan Stanley and Kotak Institutional Equities highlight sustained strong refining margins for the O2C business. Morgan Stanley expects refining margins to stay above $12/bbl. While petrochemical earnings may face sequential pressure, the impact is expected to be limited. The overall consensus points to a mixed but fundamentally sound quarter for RIL, with growth engines O2C and Jio offsetting a more subdued Retail performance.
