Reliance Industries Q3 FY26: Digital and O2C Drive 10% Revenue Growth

Introduction to Q3 Performance

Reliance Industries Ltd (RIL) demonstrated a resilient financial performance in the third quarter of fiscal year 2026, reporting a 10 percent year-on-year increase in consolidated revenue, which reached ₹2.94 lakh crore. This growth was primarily fueled by strong results from its digital services, oil-to-chemicals (O2C), and retail divisions. The company's consolidated EBITDA saw a 6.1 percent rise to ₹50,932 crore, underscoring operational strength across its major segments. However, the overall performance was moderated by challenges in the upstream oil and gas business. Net profit before minority interest grew by a modest 1.6 percent to ₹22,290 crore for the quarter.

Digital Services: The Growth Engine

The digital services segment, led by Reliance Jio, continued its strong growth trajectory. Revenue for this division increased by 12.7 percent year-on-year to ₹43,683 crore. More impressively, the segment's EBITDA grew by 16.4 percent to ₹19,303 crore, accompanied by a 170-basis-point expansion in margins. This performance was driven by accelerated subscriber additions and improved average revenue per user (ARPU), which rose 5.1 percent from the previous year to ₹213.7. The subscriber base expanded to 515.3 million, with the 5G user count crossing the 250 million mark. Furthermore, JioAirFiber established a significant milestone, becoming the first fixed wireless access service globally to surpass 10 million subscribers, ending the quarter with 11.5 million users.

Oil-to-Chemicals (O2C) Business Shines

The O2C business delivered a robust performance, with its EBITDA rising 15 percent year-on-year to ₹16,507 crore. This growth was largely attributed to a sharp increase in transportation fuel cracks, which surged between 62 and 106 percent compared to the same period last year. The positive impact of higher fuel margins and increased volumes helped offset headwinds from lower downstream chemical margins and higher feedstock freight rates. The Jio-bp fuel retailing venture also maintained its momentum, with fuel volumes growing by 24 percent. The retail network expanded by 14 percent, reaching 2,125 outlets by the end of December.

Retail Segment Shows Steady Growth

Reliance's retail arm posted an 8.1 percent increase in revenue, amounting to ₹97,605 crore for the quarter. The growth rate was influenced by several factors, including the distribution of festive season demand across two quarters, the demerger of Reliance Consumer Products Ltd, and GST rate rationalization. Despite these factors, the retail segment's EBITDA rose to ₹6,915 crore. The company continued its physical expansion, operating 19,979 stores with a total area of 78.1 million square feet. A notable highlight was the nearly fivefold jump in average daily orders for its hyper-local delivery operations, indicating strong traction in its omnichannel strategy.

Upstream Oil and Gas Faces Headwinds

In contrast to the other major segments, the upstream oil and gas business faced a challenging quarter. The segment's revenue declined by 8.4 percent to ₹5,833 crore, while its EBITDA fell by 13 percent to ₹4,857 crore. This downturn was primarily due to lower production from the KGD6 block, which experienced a natural decline in its reservoir. Weaker price realizations and higher operating costs associated with periodic maintenance activities also contributed to the segment's subdued performance.

Key Financial Metrics Summary

Financial Health and Capital Expenditure

Reliance Industries maintained a strong financial position during the quarter. Capital expenditure stood at ₹33,826 crore, which was comfortably covered by cash profits of ₹41,303 crore. This highlights the company's robust internal cash generation capabilities. Importantly, the company's net debt saw a sequential decline, settling at ₹1.17 lakh crore as of December 31. This reduction in debt reflects prudent financial management and contributes to the overall stability of the balance sheet, even as the company continues to invest in its growth verticals.

Conclusion and Outlook

Reliance Industries' third-quarter results for FY26 reflect the strength of its diversified business model. Strong growth in the digital services and O2C segments successfully compensated for the weakness in the upstream oil and gas business, leading to a resilient overall performance. The consistent expansion of the retail and telecom subscriber base, coupled with improving margins in key areas, positions the company well for sustained growth. The management's focus on maintaining balance sheet stability while pursuing strategic capital expenditure further reinforces its solid foundation for future value creation.