Why did Reliance Industries' shares fall?

Reliance Industries' shares fell because the company's third-quarter profit missed analyst estimates, primarily due to slower growth in its retail segment.

What factors impacted Reliance's retail segment?

The retail segment's growth was affected by festive discounting, investments in delivery startups, and a one-off impact from India's new labor code.

How is Reliance's oil and gas business performing?

Reliance's oil and gas segment experienced weakened performance due to lower output and softer price realizations from its KG-D6 fields.

Home / Business and Economy / Reliance Profit Misses Mark, Shares Dip

Reliance Profit Misses Mark, Shares Dip

19 Jan

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Summary

Reliance's Q3 profit of 186.45 billion rupees missed estimates.
Retail segment growth slowed due to festive discounting and investments.
Oil and gas earnings dropped amid lower output and softer prices.

Reliance Industries experienced a notable dip in its stock value during early trade on Monday, with shares falling up to 2.7%. This market reaction followed the conglomerate's announcement of its third-quarter profit, which fell short of projections. The company reported a profit of 186.45 billion rupees for the October-December period, missing the consensus estimate of 196.44 billion rupees.

The slowdown in the retail segment was attributed to several factors, including earlier festive discounting and investments in hyper-local delivery startups. This led to core margins decreasing to 8% from 8.6% a year prior. Concurrently, the oil and gas segment faced challenges from diminished output and reduced price realizations from its KG-D6 fields, resulting in an 8.4% revenue decline and a 12.7% drop in core earnings.

Despite the current earnings miss, some analysts maintain a positive outlook, noting a strategic shift in the company's earnings before interest and taxes (EBIT) mix towards structural growth areas like digital and retail. Forecasts for fiscal years 2025 to 2028 predict compound annual growth rates for O2C, Retail, and Jio revenues, while anticipating a decline in oil and gas businesses.