Reliance Industries shares slide 1.5%; stock turns negative on year-to-date basis

It has been a listless year for the oil-to-telecom conglomerate as weak financial results weighed on the sentiment.

Shares of the company have fallen over 3% on a year-to-date basis, or so far in the calendar year, 2024. 

In the past 12 months, the stock is down nearly 0.8%. 

RIL Q2 FY25 Results

Reliance Industries, India's most valuable company, reported a 5% fall in the July-September quarter net profit as weak oil refining and petrochemical business hurt operational performance.

Its consolidated net profit fell to ₹16,563 crore, or ₹24.48 per share, in July-September—the second quarter of the current fiscal—compared to ₹17,394 crore, or ₹25.71 a share, in the same period a year back, according to a company statement.

While retail and telecom businesses posted steady performance, the oil-to-chemical (O2C) business, which is made up of twin oil refineries at Jamnagar in Gujarat and petrochemical units, saw margins shrink on global oversupply. 

The oversupply was due to China flooding the market with petroleum products made from refining cheap Russian crude oil. This led to a fall in product margins.

It must be noted that RIL's oil-to-chemicals (O2C) business contributed nearly 56% of the company's revenue in FY2024. 

Meanwhile, RIL's profit before tax (EBITDA) dropped 2% to ₹43,934 crore during the September (Q2 FY25) quarter. 

The financial performance was also impacted by finance costs rising by 5% to ₹6,017 crore, primarily due to higher debt.

Also, depreciation rose by 2.3%.

On the other hand, the firm's other two main businesses—retail and telecom—saw steady performance.

The telecom segment was the bright spot, with all four key parameters—data minute usage, data consumed, average per-user earnings, and number of subscribers—showing growth.

Upstream oil and gas production businesses also saw impressive growth, with the firm and its joint venture partner BP Plc of the UK now producing a third of all the gas produced in the country.

Its total income was marginally higher at ₹2.4 lakh crore from ₹2.38 lakh crore in July-September 2023.

Recently, Reliance Industries said it had bought a 74% stake in an industrial area developer, situated in Mumbai, for ₹1,628 crore ($192 million).

Navi Mumbai IIA was renamed Navi Mumbai Special Economic Zone after the state government approved converting it into an integrated industrial area in 2018.   The deal comes at a time when the warehousing market heats up in the country, with industrial park operators facing a spike in demand as growth in India, Asia's third-largest economy, remains steady and more companies look to India in their bid to diversify supply chains away from China.