Reliance Industries Q3 Results: Fuel Demand and ARPU Expansion Key to Growth

Reliance Industries Ltd (RIL) showcased a strong performance in its Q3 results, driven by robust contributions from the retail and Oil-to-Chemicals (O2C) segments. The company gained 2.6% on the bourses, defying broader market weakness, reflecting investor confidence in its diverse growth strategies.

Key Takeaways from Q3 Performance

Retail Segment

The retail business benefited from a festive demand surge, contributing to 7% revenue growth at ₹79,595 crore. Operating margins before depreciation and amortization (EBITDA) improved by 20 basis points year-on-year to 8.3%.

• Store Expansion: RIL added 156 stores, taking the total count to 19,102, although the net store area declined by 2 million square feet, indicating a shift towards profitable growth.
• Online vs Offline: Digital commerce’s share rose to 18% (from 17% sequentially), but the offline segment outpaced with a 10% year-on-year growth, led by strong demand in grocery, electronics, fashion, and lifestyle.
• Future Outlook: Retail growth is expected to normalize in the next quarter as the festive demand fades.

RIL's telecom arm, Jio, continues to be a growth driver, though Average Revenue Per User (ARPU) growth was slightly below expectations.

• Subscriber Growth: Jio added 3.3 million subscribers, with 2 million coming from the home broadband category, reflecting increased penetration.

• ARPU Expansion: ARPU grew 4.2% sequentially, below the estimated 5-5.5%, highlighting limited benefits from recent tariff hikes.