Reliance revenue grows 27%, but profit falls 25% as margins narrow
Expenses grew faster than revenue, while a higher tax rate and lower other income weakened profit quality despite a sequential margin recovery.
Filed 17 Jul 2026, 19:50 IST · after market close · Reliance Industries Ltd (RELIANCE)
Key takeaways
- Consolidated net profit fell 24.65% YoY even as revenue grew 27.02%, because expenses rose 30.50%.
- Operating margin narrowed 2.26 percentage points YoY to 15.35%, though it recovered 0.34 percentage points QoQ.
- Other income contributed 21.88% of pre-tax profit, while the tax rate rose 7.39 percentage points YoY.
Price around the results
Revenue growth did not convert into profit growth
Reliance Industries' consolidated revenue rose 27.02% YoY, but operating profit grew only 10.75% as expenses increased 30.50%. Pre-tax profit fell 17.24%, with other income down 55.69% and interest expense up 18.49%. Other income still accounted for 21.88% of pre-tax profit, making the earnings comparison sensitive to non-operating income.
Sequential margin recovery came despite higher interest cost
QoQ revenue grew 5.24%, while expenses grew 4.81%, allowing operating margin to improve by 0.34 percentage points. Operating profit rose 7.65% and other income increased 52.60%, offsetting a 26.61% rise in interest expense. The tax rate rose by 0.53 percentage points QoQ, limiting the conversion of pre-tax growth into net profit growth.
Margin remains well below the FY26 peak
Operating margin has recovered from 15.01% in Q4FY26, but remains below 17.37% in Q3FY26 and the 18.02% FY26 peak in Q2FY26. The 15.35% margin matched the median of 17 Energy peers that had reported the quarter, placing Reliance ninth from the bottom on this measure.
The stock's decline was within its usual results-day range
The stock fell 0.31% on the first session after the results and was down 3.56% by the fifth session, with relative performance at -2.17% by then. Its past eight results reactions were split evenly between four rises and four falls, while the median absolute move was 3.21%, making the five-session decline broadly in line with its usual range.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,09,468 cr | ₹2,94,059 cr | +5.24% | +27.02% |
| Other income | ₹6,745 cr | ₹4,420 cr | +52.60% | -55.69% |
| Expenses | ₹2,61,951 cr | ₹2,49,918 cr | +4.81% | +30.50% |
| Operating profit | ₹47,517 cr | ₹44,141 cr | +7.65% | +10.75% |
| Operating margin (%) | 15.35% | 15.01% | — | — |
| Interest | ₹8,337 cr | ₹6,585 cr | +26.61% | +18.49% |
| Depreciation | ₹15,100 cr | ₹14,808 cr | +1.97% | +9.09% |
| Profit before tax | ₹30,825 cr | ₹27,168 cr | +13.46% | -17.24% |
| Tax | ₹7,629 cr | ₹6,579 cr | +15.96% | +18.00% |
| Net profit | ₹23,196 cr | ₹20,589 cr | +12.66% | -24.65% |
| EPS (₹) | ₹15.48 | ₹12.54 | +23.44% | -22.41% |
Operating margin of 15.35% compares with a Energy sector median of 15.35% across 17 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.31% | +0.08% |
| Next session | -1.77% | — |
| 5 sessions | -3.56% | -2.17% |
| 15 sessions | +0.01% | — |
Volume on the results session was 1.06× its 20-day average.
What to watch
- Whether operating margin holds above 15.35% after the QoQ recovery of 0.34 percentage points.
- Whether expenses continue to grow slower than revenue after Q1's QoQ comparison of 4.81% versus 5.24%.
- Whether other income's contribution to pre-tax profit moves below or above 21.88%.