RIL shares drop over 1% post Q2 result; what's hurting the sentiment?

RIL, India's most valuable company, on Monday 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 during the period, compared to ₹17,394 crore or ₹25.71 a share in the same period a year back, according to a company statement.

However, the figure was better than analysts' estimates, who had predicted a fall of 10% in the net income. 

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 company said its O2C performance was hurt by a global oversupply due to China flooding the market with petroleum products it made from refining cheap Russian crude oil. This led to a fall in product margins.

Besides, crude oil prices on the global front were down about 3% after Israeli Prime Minister Benjamin Netanyahu reportedly told the United States that Israel is willing to strike Iranian military targets and not nuclear or oil ones, easing immediate concerns about supply disruptions.

One of the minor reasons could be a fall in crude oil prices on the global front, as RIL's exploration and production (E&P) could see some impact due to this, according to an analyst. 

However, the stock is down due to overall subdued market sentiment, the analyst adds. 

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

The company's profit before tax (EBITDA) dropped 2% to ₹43,934 crore.

RIL’s consolidated revenue for Q2 came in at ₹2.35 lakh crore, marginally lower than a year ago. 

Jio Platforms Q2 FY25 Results

Jio Platforms on Monday reported a 23.4% year-on-year rise in its consolidated net profit for Q2 FY25 to ₹6,539 crore as average revenue per user surged to ₹195.1 per month.

The revenue from operations of Jio Platforms, which houses Reliance Industries' telecom and digital businesses, rose 18% to ₹31,709 crore in the just-ended September quarter.