Mumbai: Reliance Industries Ltd (RIL), led by Chairman and Managing Director Mukesh Ambani, reported a 22 per cent year-on-year decline in consolidated net profit for the first quarter of FY27, despite posting robust growth in revenue and operating earnings.
The company attributed the decline in profit primarily to the absence of a one-time exceptional gain recorded in the corresponding quarter last year from the sale of its stake in Asian Paints. Excluding that exceptional item, Reliance continued to deliver healthy operational performance across its diversified businesses, supported by growth in digital services, retail and energy operations.
The results also reflect the company’s continued investment in 5G infrastructure, Oil-to-Chemicals (O2C) projects and its expanding New Energy business.
Net profit declines due to exceptional gain base
Reliance Industries reported a consolidated net profit of Rs 20,946 crore for the April-June quarter of FY27, compared with Rs 26,994 crore in the same period last year.
The year-on-year decline was largely because the first quarter of FY26 included a one-time gain from the sale of the company’s stake in Asian Paints, creating a high base for comparison.
Without this exceptional gain, the company’s underlying operating performance remained resilient across its key business segments.
Revenue jumps 25 per cent
Despite the fall in net profit, Reliance posted strong top-line growth during the quarter.
Revenue from operations increased 25 per cent year-on-year to Rs 3.11 lakh crore, compared with Rs 2.48 lakh crore in the corresponding quarter of the previous financial year.
The increase was supported by improved performance across multiple businesses, reflecting the strength of Reliance’s diversified portfolio.
The company also reported a 10 per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA), which rose to Rs 54,067 crore during the quarter.
The growth in EBITDA indicates continued improvement in operational efficiency despite a challenging macroeconomic environment.
Mukesh Ambani highlights resilient performance
Commenting on the quarterly results, Mukesh Ambani said Reliance had made a steady beginning to the new financial year.
He noted that all the company’s major businesses delivered strong operating performance despite continuing geopolitical uncertainties and fluctuations in global commodity markets.
According to Ambani, Reliance’s diversified business model has helped the company remain resilient amid external challenges.
The company continues to operate across sectors including energy, petrochemicals, telecommunications, retail and new energy, reducing dependence on any single business segment.
Higher depreciation impacts earnings
One of the factors affecting profitability during the quarter was a rise in depreciation expenses.
Reliance reported depreciation of Rs 15,100 crore, representing an increase of 9 per cent compared with the same quarter last year.
The company said the higher depreciation was mainly due to increased capitalisation of assets in its digital services business following the continued rollout of its nationwide 5G network.
As more infrastructure assets become operational, accounting standards require companies to recognise higher depreciation charges over their useful life.
Finance costs also increase
Reliance’s finance costs also recorded a notable increase during the quarter.
The company reported finance expenses of Rs 8,337 crore, up 18 per cent year-on-year.
According to the company, the increase was driven by higher liability balances and the financial impact associated with the capitalisation of 5G-related assets.
While these higher costs affected net profit, they also reflect continued investment in long-term growth initiatives.
Continued investments in growth businesses
Reliance maintained a strong investment pace during the quarter.
The company’s capital expenditure stood at Rs 38,682 crore during the April-June period.
The investments are being directed towards expanding several strategic businesses, including:
- Oil-to-Chemicals (O2C)
- New Energy projects
- Digital services
- Consumer and retail businesses
Reliance said it continues to make significant progress in building its clean energy ecosystem while simultaneously strengthening infrastructure across its consumer-facing businesses.
The company remains focused on expanding its retail footprint, enhancing digital connectivity and accelerating its transition towards renewable energy.
Strong operational performance despite lower profit
Although headline profit declined, analysts are likely to view the results in the context of last year’s exceptional gain.
The strong growth in revenue, EBITDA and continued capital investment suggests that Reliance’s core businesses remain on a stable growth trajectory.
The expansion of its digital business, supported by ongoing investments in 5G infrastructure, along with progress in energy transition projects, is expected to remain central to the company’s long-term strategy.
Investors will also continue to monitor developments in Reliance’s retail and telecom businesses, which remain major contributors to future growth.
Conclusion
Reliance Industries’ first-quarter results highlight the difference between accounting comparisons and underlying business performance. While consolidated net profit declined 22 per cent due to the absence of last year’s exceptional gain from the Asian Paints stake sale, the company delivered strong revenue growth, improved operating earnings and continued investing heavily in future businesses. With significant capital expenditure across 5G, O2C and New Energy projects, Reliance remains focused on long-term expansion despite short-term pressure on profitability.