Reliance Q3 Earnings: Buy the 10% Stock Correction?

Reliance Industries Q3 Preview: Opportunity in the Correction?

As Reliance Industries (RIL) prepares to announce Q3 earnings, a recent 6% decline over the past month and an almost 10% drop over the past 10 sessions have investors weighing caution and optimism.

Though the stock price has softened, analysts maintain that the fundamental drivers remain intact. Below is a breakdown of expectations for RIL’s key segments for Q3 FY26.

The Big Picture: Consolidation

The overall expectation is for a steady quarter with no significant surprises. While consolidated revenue may dip by 3% quarter-on-quarter (QoQ), EBITDA is projected to grow by about 5% sequentially, pointing to margin expansion—an essential metric in this context.

O2C (Oil-to-Chemicals): The Heavy Lifter

This quarter, the O2C business is expected to be the primary driver of growth.

Refining Strength: Singapore Gross Refining Margins (GRMs) have surged, jumping 97% sequentially to around $7.5 per barrel.

Product Spreads: Diesel, ATF, and gasoline spreads have improved significantly, rising between 36% to 66%. Tighter global supplies, driven by disruptions to Russian and African refining capacity, have bolstered this strength.

The petrochemical segment still faces headwinds, with a 1% decline. However, the decline is slowing.

Reliance Retail: Chasing a Milestone

The retail segment presents a mixed picture, with strong revenue targets and base-effect challenges.

The Bull Case: Aided by the festive season and government measures to boost consumption, there is an expectation that Reliance Retail could report quarterly revenues crossing the ₹1 lakh crore mark for the first time.

Analysts suggest that growth may be moderate (low single digits) as the company faces a firm base from Q3 of the prior year. The story appears positive from an analytical standpoint, particularly as the consumer products business scales up.

Jio: Steady Growth & IPO Buzz

The telecom vertical is likely to deliver steady performance.

ARPU & Revenue: Revenue is expected to rise roughly 2.2% QoQ. Even without a tariff hike, Average Revenue Per User (ARPU) is expected to inch up to around ₹213-₹214, driven by subscriber upgrades and the shift to postpaid.

Broadband Impact: The rapid adoption of AirFiber (Fixed Wireless Access) is a key factor in improving the subscriber mix.

Analytically, the market remains attentive to updates on the Jio IPO, which was earlier hinted at for the middle of this year.

Oil & Gas: Expected Softness

In contrast to refining, analytical expectations call for softness in the Oil & Gas exploration segment.

Volume & Price Pressure: A decline in production from the KG-D6 basin (down 8% YoY), combined with lower deepwater gas prices, is likely to drag EBITDA down by roughly 14% year on year.

Retreat for an analyst verdict: Is an opportunity emerging after the correction?

Even with a 10% drop and some risks, analysts think the current valuation is an opportunity. The overall view is that O2C remains strong, Jio helps the balance sheet as spending slows, and Retail continues to grow.