RIL: Growth baton to shift from O2C to new energy in FY28

What happened

Reliance Industries reported Q2FY27 consolidated EBITDA, or operating earnings before interest, taxes, depreciation and amortization, of Rs.56,616 crore, up 23% year on year. O2C earnings per tonne rose 68% year on year to Rs.13,924, while retail EBITDA margin slipped to 7.34% and revenue was flat at Rs.80,220 crore.

Confirmed

Global impact / market context

O2C’s strong contribution was driven by unusually high refining margins, which the article says are at least twice their five-year average. If those margins ease amid weak oil-demand expectations, O2C earnings could weaken; flat retail revenue and a lower margin also limit a clear offset from that business.

Analyst inference

The article says investors face a tension between strong O2C results and weaker retail profitability. O2C typically receives lower valuation multiples because it is tied to commodity markets, while retail receives higher multiples, so temporary O2C gains may not lead investors to value Reliance more highly.

Analyst inference

What to watch

1. Track whether refining margins fall from their unusually high level; lower margins could reduce O2C earnings per tonne and weaken the contribution that drove consolidated operating earnings. Analyst inference
2. Check upcoming results for retail revenue growth and EBITDA margin, meaning operating earnings as a share of revenue, after revenue stayed flat and the margin dipped to 7.34%. Analyst inference
3. The article anticipates a demand rebound in 2027 but says demand may remain below 2025 levels; assess whether subsequent results show this outlook affecting O2C profitability. Confirmed

Evidence

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