RIL shares edge higher ahead of Q3; earnings to improve sequentially

Shares of Reliance Industries Ltd (RIL) opened higher on Thursday, extending gains for the second straight session, ahead of its December quarter earnings report slated to be released post-market hours today. The stock has risen nearly 2% in two sessions, recovering past four session losses, amid hopes of strong Q3 earnings, led by a recovery in gross refining margin (GRM), lagged impact of tariff hike, and steady growth in retail business driven by the festive season.

Continuing its gaining streak, RIL shares opened 0.6% higher at ₹1,260.20 on the BSE, with a market capitalisation of ₹16.99 lakh crore. On Wednesday, the country’s most valued stock ended 1.09% higher as investors rushed to buy shares ahead of Q3 earnings report.

In the last one year, RIL shares have delivered a negative return of 9% to its shareholders, while it corrected over 20% in the past six months. The counter lost over 1% in a month, while it gained nearly 3% in the calendar year 2025. It touched a 52-week high of ₹1,608.95 on July 8, 2024, and a 52-week low of ₹1,202.10 on December 20, 2024.

According to the domestic brokerage house JM Financial, the recent weakness in RIL’s shares were primarily due to 5-6% downgrade in consensus FY25 EBITDA estimate driven by weak oil-to-chemical (O2C) and retail business earnings in H1 FY25; and limited clarity on telecom subsidiary’s Jio listing timeline.

The sentiment was further dented by accelerated stake sale by foreign institutional investors (FIIs), declining to 22.5% as of end-Oct'24, from the peak of 28.3% in Mar'21. However, domestic institutional investors’ (DIIs) shareholding in RIL has risen to 17.9% as of end-Oct'24, from the last 4-year low of 12.3% in Mar'21. FII’s stake has decreased by 112bps in Oct'24 as against 62bps rise in DII’s ownership in the company during the same period.

What to expect from RIL Q3

After two muted quarters, billionaire Mukesh Ambani-led company is expected to post see sequential improvement in key metrics in the October-December period of the current fiscal, aided by growth in the core O2C business and digital services segments. The telecom and retail businesses are expected to report muted performance during the quarter under review. Overall, the RIL earnings is projected to rise sequentially, while it is seen degrowing on year-on-year (YoY) basis.

Investors seek clarity from the management on ₹75,000 crore investment announcements in the new energy business, while projection on retail store additions and any further hike in telecom tariff would be also keenly watched.

Brokerage firm Nuvama Wealth Management expects RIL’s consolidated EBITDA to rise 9% sequentially to ₹42,500 crore, supported by growth in telecom business, recovery in O2C segment, and modest retail growth.

The brokerage estimates O2C’s EBITDA at ₹13,600 crore, up 10% QoQ in Q3 FY25, driven by an increase in refining margins to $9.3 a barrel, which is partly offset by a moderation in petchem margins.

The operating profit, of EBITDA, of Jio is pegged at ₹16,170 crore, up 8% QoQ, on the back of sharp rise in ARPU (average revenue per user) to ₹208 per month and a recovery in subscriber addition. The core retail EBITDA is projected to rise 5% QoQ to ₹6,380 crore.

Motilal Oswal Financial Services expects Reliance's net sales to grow 2.5%, and the profit to rose 2.7% YoY. The consolidated EBITDA is pegged to climb by 4% YoY. "Further clarity on ₹75,000 crore announcements in the new energy business, growth in retail store additions, and any pricing action in telecom are the key monitorable," the brokerage firm said.

For Q2 FY25, RIL posted a consolidated profit of ₹16,563 crore, down 4.7% compared to ₹17,394 crore in the year-ago period. Consolidated revenue from operations increased marginally by 0.2% year-on-year (YoY) to ₹2.35 lakh crore, while the consolidated EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) stood at ₹43,934 crore, up 2% YoY. The EBITDA margin dropped to 17% as compared to 17.5% in the previous year.

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