RELIANCE

Delivers Resilient Q4 Amid O2C Headwinds

(RIL) reported consolidated EBITDA of ₹44,141 crore in Q4FY26, up just 0.7% YoY. While modest, the outcome is seen as resilient given the severe impact of the West Asia war on crude availability and petrochemical margins. Retail and Jio Platforms provided growth offsets, though margin pressures in hyper-local commerce weighed on profitability. The stock trades at ~20x FY27 consensus EPS, leaving room for investor re-rating if O2C pressures ease or Jio’s public issue advances. Segmental Performance Oil-to-Chemicals (O2C) EBITDA: ₹14,520 crore (–4% YoY). Production volume: 17.2 million tonnes (–4% YoY). EBITDA per tonne: steady at ₹8,442. Constraints: crude availability, under-recoveries as OMCs held fuel prices, weaker petrochemical spreads (polyethylene, polypropylene). Retail Revenue: ₹87,344 crore (+14% YoY, adjusted for FMCG demerger). Store count: +4% YoY; store area: +1% YoY. Same-store sales growth: healthy single digits; online sales drove incremental growth. EBITDA: ₹6,690 crore (+3% YoY). Margin: 7.66% (–62bps, lowest in 14 quarters). Pressure: hyper-local commerce, with daily orders up 300% YoY, raising delivery costs. Jio Platforms (JPL) Non-connectivity revenue: ₹4,878 crore (+8% QoQ). Non-connectivity EBITDA: ₹1,289 crore (+44% QoQ), showing operating leverage. Connectivity (telecom): ARPU flat at ₹214; revenue/EBITDA up 2% QoQ. IPO: on track, though timeline not disclosed. Outlook & Valuation Relief in O2C hinges on resolution of West Asia war and normalization of crude flows. Retail margins likely to remain pressured as Reliance prioritizes scale in hyper-local commerce. JPL’s diversification into enterprise and digital services offers long-term growth visibility. Valuation: ~20x FY27 EPS consensus, not expensive relative to growth potential. Conclusion RIL’s Q4FY26 highlights resilience in O2C, strong retail topline, and diversification in Jio Platforms, though margin pressures persist.