Reliance profit falls despite record revenue, Jio eyes $180bn IPO

Reliance Industries crossed the ₹3 lakh crore revenue threshold for the first time in the June quarter, but a sharp fall in net profit underscores the cost of its ongoing expansion. Operational revenue reached ₹3.12 lakh crore, a 25% increase from a year earlier, boosted by an ₹8,924 crore contribution from the Asian Paints deal. However, net profit attributable to owners fell to ₹20,946 crore from ₹26,994 crore.

The divergence between top-line growth and bottom-line contraction highlights the capital-intensive nature of Reliance's core businesses right now. "Reliance has made a steady start to FY27, with all businesses delivering strong operating performance," said chairman Mukesh Ambani. He credited the company's diversified structure for weathering "continuing geopolitical tensions and volatile commodity markets."

The oil-to-chemicals division drove the bulk of the revenue surge, with sales rising 30.4% to ₹2,01,803 crore and segment ebitda climbing 17.2% to ₹17,010 crore. Despite these gains, domestic margins took a hit from the reintroduction of a special additional excise duty on diesel, petrol, and aviation turbine fuel.

Reliance Retail reported an 8.2% revenue increase to ₹79,745 crore, though net profit dropped 14.2% to ₹2,806 crore. The demerger of its fast-moving consumer goods business in December weighed on the figures. Underlying growth in grocery, fashion, and electronics remained in the double digits, but margins contracted for a third straight quarter due to a rising mix of e-commerce sales and heavy infrastructure investments.

For investors, the most significant forward-looking detail is the planned initial public offering of Jio Platforms. The telecom and digital unit is estimated to list at a valuation of $135 billion to $180 billion, which would make it India's largest listing. "This will be an important milestone in Jio's journey and will give investors an opportunity to participate in India's digital growth story," Ambani said.

Jio's quarterly revenue grew 11.8% to ₹39,173 crore on the back of subscriber additions and rising 5G adoption. However, the capitalization of 5G assets triggered higher depreciation and finance costs, causing net profit to dip 2.2% sequentially to ₹7,764 crore. On an annual basis, profit still grew 9.2%, following a fiscal year in which Jio surpassed the ₹30,000 crore profit mark.

Chief financial officer Srikanth Venkatachari framed the results against a backdrop of global instability. "This has been an extraordinary quarter when you look at it from point of view of macro volatility, energy market shock, supply chain dislocation that happened, and in that context, when you look at the overall performance, I do want to say that it's been an extraordinary performance too," he told analysts. Reliance shares closed up 2.6% at ₹1,326.50 on the Bombay Stock Exchange on Friday before the earnings release.