Reliance Q4 Preview: Jio and Retail to Shine, Energy Biz Faces Margin Pressure

Mukesh Ambani's oil-to-telecom conglomerate, Reliance Industries, is set to report its fourth-quarter earnings today. According to analysts, investor attention will be focused on the company’s retail and telecom arm, Jio—both of which are expected to deliver strong growth. Meanwhile, its traditional business—the energy segment—is likely to report weaker margins.

"We expect RIL's Q4 core EBITDA to remain largely flat quarter-on-quarter, but market focus will likely be more on (1) retail segment growth trends and (2) residual tariff hike-driven growth in Jio revenue, i.e., we expect +4% QoQ growth, which is approximately 200 basis points faster than Bharti’s,” Goldman Sachs said in a note dated March 28. “As part of the quarterly update, we also expect commentary on FY26 retail growth guidance and progress on new energy capacity ramp-up.”

The U.S. brokerage remains bullish on Reliance and maintains a Buy rating with a 12-month target price of Rs 1,640. The stock is currently trading 0.61% lower at Rs 1,293.70. Over the past six months, it has declined by more than 2.66%. Although Goldman has slightly trimmed its FY25 earnings estimate due to weaker refining and petrochemical margins, it raised its target price as it now values the company based on FY27 performance.

According to Yes Securities, Reliance’s refining throughput is expected to rise 3.5% year-on-year to 17.7 million metric tonnes, but dip 1.1% compared to the previous quarter. The gross refining margin (GRM) is estimated at $10.4 per barrel.

Goldman believes Reliance’s earnings growth will bounce back in FY26, helping to narrow the gap between the current stock price and the company’s net asset value (NAV), commonly referred to as the NAV discount.

Key Numbers to Watch in Q4

Goldman expects Reliance’s Energy EBITDA to decline sequentially due to weaker oil-to-chemical (C2C) earnings.

“In refining, we expect a sequential decline driven by weaker Singapore refining product cracks and higher crude premiums, which are putting pressure on Asian refining margins. The tightening of U.S. sanctions on Russian oil in January led to reduced availability of Middle Eastern crude. As a result, the Dubai-Brent differential moved to a $0.2/bbl premium in Q4 from a $1.0/bbl discount in the previous quarter, while average Saudi official selling prices (CSPs) rose to $1.7/bbl in Q4 from $1.3/bbl earlier,” the note said.

Despite the near-term softness, Goldman remains optimistic about refining margins over the medium term. They estimate that nearly 1 million barrels per day of global refining capacity will be permanently shut by the end of 2025, which should push up utilisation rates and margins.

In the petrochemicals segment, a slower recovery in margins is expected, particularly for products like olefins, due to unresolved supply-demand imbalances. However, Goldman expects Reliance to outperform its peers, helped by its cost advantage—largely due to its use of cheap U.S. ethane gas over more expensive naphtha.

Goldman forecasts a robust quarter for Jio, with 4% QoQ revenue growth and 21% YoY EBITDA growth. Another mobile tariff hike is anticipated in 2025, and with capital expenditure declining and free cash flow improving, the segment’s profitability is expected to rise further.

In telecom, average revenue per user (ARPU) is likely to increase to around Rs 208, with a subscriber base of 487 million, according to Yes Securities.

Retail growth is rebounding after a subdued period. Goldman points to better store efficiency (including closures of underperforming locations), restructuring of the grocery business, and the launch of trendier fashion formats like Yousta as key drivers. Margins are also expected to show a slight improvement now that much of the restructuring is complete.

"Retail revenue is expected to grow 7.4% year-on-year but fall 8.9% quarter-on-quarter to Rs 823.5 billion, with EBITDA margin seen at 7.5%," said Yes Securities.