Reliance Industries is expected to deliver steady performance in the December quarter, with brokerages projecting mid-single digit growth across revenue and profits. The performance will be supported mainly by strength in the oil-to-chemicals and digital businesses, even as retail growth remains muted and upstream continues to face pressure.

According to an average estimate of seven brokerages, RIL's consolidated revenue is expected to grow about 8.00% year-on-year in Q3, while profit after tax is seen rising around 7.00% from a year earlier. Consolidated EBITDA is projected to grow close to 9.00% year-on-year, with a modest sequential improvement.

Oil-to-Chemicals Business Leads Growth

The oil-to-chemicals business is expected to be the biggest driver of earnings growth during the quarter. Most brokerages expect a strong rebound in O2C EBITDA, aided by better refining margins and a weaker rupee.

Emkay forecasts an 11.00% quarter-on-quarter rise in O2C EBITDA to about ₹16,600.00 crore. YES Securities expects refining throughput to decline marginally by 0.60% year-on-year and 1.70% sequentially to 17.80 million metric tonnes, while GRMs are estimated at $13.60 per barrel.

Digital Services Show Steady Progress

The digital services business is expected to post steady growth, driven by continued subscriber additions and incremental improvement in average revenue per user.

Kotak Equities expects digital EBITDA to increase 16.50% year-on-year, though sequential growth is likely to be modest at about 2.70%. JM Financial expects ARPU to inch up 0.40% sequentially to around ₹212.00, supported by tariff upgrades.

Retail Segment Faces Headwinds

Retail is expected to remain the soft spot in RIL's portfolio, with growth impacted by higher competitive intensity and investments in quick-commerce.

YES Securities estimates retail revenue to grow 8.10% year-on-year and 7.90% sequentially to about ₹97,700.00 crore, with EBITDA margin at around 7.59%. Profitability could remain under pressure due to the ramp-up in quick-commerce initiatives.

Upstream Business Continues Decline

The upstream oil and gas business is expected to continue facing headwinds due to lower production and softer realizations.

Emkay expects upstream EBITDA to decline 4.00% sequentially to around ₹4,810.00 crore, while the natural decline in gas output continues to impact performance.

Overall Outlook

Brokerages expect RIL's December quarter performance to be anchored by strong O2C and digital earnings, which should more than offset the continued weakness in upstream and muted growth in retail. The company's diversified portfolio continues to provide stability, with the oil-to-chemicals and digital businesses compensating for challenges in other segments.

Reliance Industries is expected to report largely stable consolidated numbers for Q3FY26 on a quarter-on-quarter basis, with modest growth across revenue, operating profit and net earnings. Analysts anticipate steady execution in core segments with selective tailwinds in oil-to-chemicals and retail driving performance. The oil-to-telecom conglomerate is scheduled to announce Q3 results on Friday, January 16.

Financial Performance Overview

The company's October-December quarter is projected to show measured improvement across key financial metrics:

Operating margin is projected to improve to 18.7% from 18.0%, supported by better operating performance in key businesses.

Segment-wise Performance Analysis

Oil-to-Chemicals (O2C) - The Bright Spot

The O2C segment is expected to be one of the standout performers in the quarter. O2C Ebitda is projected to rise 6.5% quarter-on-quarter to ₹15,980 crore from ₹15,008 crore, marking the highest sequential jump in the last four quarters. Growth is likely driven by better refining margins and benefits from a weaker rupee, partly offset by continued weakness in the petrochemicals business.

Oil and Gas Exploration - Sharp Decline Expected

In contrast, the oil and gas exploration segment faces significant headwinds. Ebitda from this business is projected to fall 12% quarter-on-quarter to ₹4,388 crore from ₹5,002 crore, representing the biggest drop in the last 15 quarters. The decline is attributed to lower realisations and volumes during the quarter.

Retail Business - Steady Growth Amid Challenges

The retail segment is expected to deliver steady sequential growth despite year-on-year pressures:

However, year-on-year Ebitda growth is expected to remain weak due to a high base, influenced by losses in JioMart Quick Commerce and the demerger of Reliance Consumer Products. The festive season impact has been split between second and third quarters this year, compared with being concentrated in third quarter last financial year, further affecting comparability.

Jio Performance Metrics

Reliance Jio is expected to maintain steady growth momentum:

Average revenue per user is seen inching up to ₹213 from ₹211, marking the sixth consecutive quarter of ARPU growth. However, the pace of growth is the slowest in the last six quarters as the impact of earlier tariff hikes starts to taper off.

Key Focus Areas for Investors

Beyond headline numbers, investors will closely monitor several strategic aspects:

• Reliance's crude sourcing strategy and margin outlook in refining and petrochemicals
• Signs of retail growth pickup during the festive season
• Updates on the new energy business development
• Commentary on potential tariff hikes ahead of the Jio IPO
• Progress in Jio Fiber expansion
• Guidance on capital expenditure plans and debt levels

The demerger of Reliance Consumer Products and reduced retail selling prices following GST rate cuts are each expected to have a 2% impact on retail topline, adding to the complexity of year-on-year comparisons.