Mumbai [Maharashtra], January 17 : Reliance Industries Ltd. (RIL) delivered a robust performance in the third quarter of FY25, with analysts across major financial institutions highlighting better-than-expected strong recovery in its Retail and Oil-to-Chemicals (O2C) businesses.
Consolidated EBITDA stood at Rs 438 billion, up 12.1 per cent sequentially and 7.7 per cent year-on-year, surpassing consensus estimates by 5 per cent.
Retail recovery signals resilience, Jefferies noted that the resurgence of growth in Reliance Retail indicates that the worst may be over. The segment's performance exceeded expectations, with pilot initiatives like express deliveries across 4,000 pin codes showing promise.
It said "O2C profitability was aided by refining, where we see improved outlook in FY26. Further traction in Retail, tariff hike and possible listing of Jio could be triggers in FY26"
According to JM Financials, the retail rebound was the key driver of RIL's strong show, with Retail EBITDA beating estimates by 8 per cent.
Bank of America (BofA) and Citi also highlighted the turnaround in the Retail segment, stating that it marked a departure from the subdued performance in recent quarters.
HSBC Global Research expects the momentum in retail to continue, citing it as a significant catalyst for the company's growth in 2025.It said "We expect multiple catalysts in 2025 ranging from turnaround of retail, start of new energy and new momentum in digital".
Oil to Chemical segment boosts profitability, the O2C business, which accounted for 61 per cent of RIL's attributable profit after tax (PAT), was a major contributor to the overall performance.
Nuvama reported a 16 per cent sequential increase in O2C EBITDA, driven by improved refining margins and higher polymer deltas.
UBS added that refining spreads and festive demand further supported the segment's growth, while Goldman Sachs highlighted O2C's contribution to earnings exceeding expectations.
Jio performance is mixed but promising, while Jio's EBITDA missed Jefferies' estimates due to lower average revenue per user (ARPU) and elevated costs, UBS noted a 17 per cent year-on-year improvement, with EBITDA margins holding steady at 53 per cent.
Analysts, including HSBC Global Research and Goldman Sachs, believe upcoming tariff hikes and digital momentum could further bolster the segment.
Nomura and JP Morgan emphasized the sequential improvement in consolidated earnings, suggesting that Retail recovery and refining strength could support the stock in the near term. HSBC Global Research anticipates multiple catalysts in 2025, including new energy ventures and digital growth.
Overall, analysts remain optimistic about RIL's trajectory, with expectations of stronger returns in FY26, driven by its diversified business portfolio and strategic initiatives.
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