After a subdued performance in FY25, brokerages anticipate a rebound in Reliance Industries’ oil-to-chemicals (O2C) segment, the company’s largest revenue driver, driven by an expected improvement in refining margins in the next financial year.
The O2C segment posted a 6% year-on-year (YoY) increase in revenue, reaching Rs 1.49 lakh crore in Q3 FY25, driven by strong domestic demand and higher production volumes. Ebitda for the segment saw a slight improvement, rising to Rs 14,402 crore from Rs 14,065 crore in the corresponding quarter of the previous year.
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The O2C business, which includes refining, petrochemicals, and fuel retailing, benefited from better product spreads and a focus on operational efficiency.
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“After a subdued FY25, we expect earnings to recover for the O2C segment, driven by improvement in refining margins,” Motilal Oswal said in a report.
The brokerage further noted that the estimated consolidated Ebitda for the O2C and E&P businesses in FY27 is expected to remain broadly in line with FY24 levels, though upside risks could emerge.
Segment-wise, Motilal Oswal expects RJio to be the primary driver of Ebitda growth from FY24 to FY27, fuelled by frequent tariff hikes, market share gains in the wireless segment, and the expansion of its Homes and Enterprise businesses.
“We expect growth recovery in retail after the recent rationalisation of unprofitable stores and B2B, driven by an increased footprint, category additions, and potential foray into quick commerce,” it said.
Global brokerage Jefferies also shared a similar view. “We expect the O2C segment to improve in FY26, driven by a tighter refining demand-supply balance, and project a 14% Ebitda growth. However, petrochemical margins are likely to remain range-bound,” Jefferies said
Further, traction in retail, tariff hikes and the possible listing of Jio could act as key triggers for Reliance Industries’ stock in FY26, Jefferies said.
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Nuvama Institutional Equities said that Reliance Industries’
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