Reliance Q1 FY27: Record recurring EBITDA in a quarter of energy shock

Reliance Industries began FY27 with record recurring profitability, even as the quarter was marked by heavy macro volatility and a major energy supply shock. Consolidated gross revenue rose to 340257 crore, up 24.5% year on year. Recurring EBITDA reached 54067 crore, up 10.1%, and recurring PAT rose to 23196 crore, up 6.1%. Management highlighted that last year’s quarter included a one-off profit from sale of listed investments, and therefore focused comparisons on recurring performance.

The quarter’s shape was clear. The energy business benefited from exceptional product cracks and stronger petrochemical deltas, while the consumer stack continued to scale. At the same time, near-term profitability in retail softened as the company invested to expand online and hyper-local delivery capacity. The balance sheet remained conservative, with net debt at 122914 crore and net debt to LTM EBITDA around 0.60x.

Consolidated performance and what drove it

Reliance pointed to broad-based revenue growth across Oil to Chemicals, Digital Services, and Retail. The growth in energy was amplified by higher crude prices, while Jio and Retail delivered double-digit topline growth.

The quarter also showed the cost of scale in specific pockets. Finance cost rose to 8337 crore, up 18.5% year on year, and depreciation increased to 15100 crore, up 9.1%. Management attributed the higher finance cost and depreciation largely to the capitalisation of 5G assets in Jio.

Energy: strong cracks, but not all margin was captured

Oil to Chemicals delivered one of the strongest quarters in recent years on operating metrics. Segment revenue rose to 201803 crore, up 30.4% year on year. EBITDA increased to 17010 crore, up 17.2%. However, EBITDA margin fell by 100 bps to 8.4%, reflecting several headwinds even as cracks surged.

Management described a quarter where supply disruptions in the Middle East lifted fuel cracks sharply, while ethane economics improved because US ethane prices softened even as naphtha-linked product prices rose. Reliance also emphasised its ability to diversify crude sourcing, including higher sourcing from Russia and Latin America, and to redirect product placements to deficit markets such as Singapore, Australia, and East and South Africa.

At the same time, the company cited margin drags that limited the conversion of high cracks into profit. These included higher crude premiums, sharply higher freight and insurance costs, SAED related costs, and under-recoveries in domestic fuel retail as retail prices were held stable. Operations were also affected by a planned turnaround and a policy-driven diversion to increase LPG availability.

Oil and Gas remained steady. Revenue rose to 6298 crore, up 3.2% year on year, while EBITDA was 4973 crore, down 0.5%. Lower KG D6 gas volumes and price realisations were partly offset by higher liquids realisations and stronger CBM performance.

Jio: operating leverage continues as digital services scale

Jio Platforms delivered another quarter of double-digit EBITDA growth with visible margin expansion. Jio Platforms gross revenue rose to 45961 crore, up 12%, while operating revenue rose to 39173 crore, up 11.8%. EBITDA increased to 20865 crore, up 15.1%, and EBITDA margin expanded to 53.3%.

Operationally, Jio ended the quarter with 533.3 million subscribers and about 285 million 5G users. Data traffic rose to 69.4 exabytes, up 26.9% year on year. ARPU was 215.6 per month. Management highlighted that digital services revenue grew 20% year on year, outpacing connectivity growth, driven by content, cloud compute, IoT, and managed services.

In the concall, management acknowledged questions on the ARPU trend and explained that promotional offers in fixed broadband can influence ARPU mix. It also reiterated the role of fixed wireless access, noting that around half of the 28.6 million fixed broadband base is now on Jio AirFiber.

Retail: investing into online scale with near-term margin pressure

Reliance Retail reported gross revenue of 90408 crore, up 7.4% on a reported basis. Management also disclosed that gross revenue adjusted for the demerger of the consumer brands business grew 11.6% year on year. EBITDA was 6309 crore, down 1.1%, with EBITDA margin at 7.9%, down 80 bps.

The underlying narrative was consistent across both the investor deck and the transcript. The company is consciously trading near-term margins to scale digital commerce and build hyper-local delivery infrastructure. Management described FY27 as the year to scale online with discipline, followed by FY28 and FY29 as years to convert scale into value through higher repeat rates, larger baskets, improved fulfilment density, own-brand mix, monetisation, and better inventory productivity.

Operationally, Reliance Retail reported 396 million registered customers and 568 million transactions in the quarter. Grocery digital average daily orders grew 116% year on year. Management also noted that omnichannel customers spent 2.7 times more than pure-offline customers.

New Energy: execution updates and manufacturing scale

New Energy remained a key strategic focus, with the company outlining progress across renewable generation, integrated PV manufacturing, battery manufacturing, and green fuels. Management referenced a US$3 billion contract with Samsung C&T for green ammonia and continued work on project development and engineering in Kutch.

The company stated that around 1 GWp of HJT modules have already been produced and ALMM certified, with plans to scale up to 20 GWp annual manufacturing capacity. Battery manufacturing scale-up was described with 40 GWh targeted to be commissioned this year and an announced scale-up to 120 GWh annual capacity. Kutch installation is aimed post-monsoon, with transmission readiness intended to support electricity supply this year.

Key takeaways

Reliance’s Q1 FY27 performance reinforced two themes. First, its energy and materials platform can still deliver strong profitability in volatile markets, particularly when the company can flex feedstock and product placement. Second, the consumer engine is expanding its footprint, but the path to higher margins in retail is being deliberately sequenced behind online scale creation.

The quarter also highlighted what investors will likely watch next: whether retail’s digital investments begin to show improving unit economics, and how quickly new energy projects transition from execution milestones to meaningful financial contribution.