Reliance margin falls as costs outpace revenue
Consolidated net profit fell 8.94% year on year, while the stock's 2.86% gain was within its usual results-day range.
Filed 24 Apr 2026, 22:57 IST · after market close · Reliance Industries Ltd (RELIANCE)
Key takeaways
- Consolidated operating margin fell 1.76 percentage points year on year to 15.01% as expenses grew 14.88%, faster than revenue growth of 12.50%.
- Consolidated net profit declined 8.94% year on year, with higher interest costs and a 1.44-percentage-point increase in the tax rate adding to the margin pressure.
- Reliance's 2.86% post-results gain was smaller than its 3.21% median absolute move after the last eight results.
Price around the results
Revenue grew, but profit conversion weakened
Consolidated revenue grew 12.50% year on year and 11.01% sequentially, but operating profit rose only 0.70% year on year and fell 4.08% quarter on quarter. Expenses grew faster than revenue in both comparisons, narrowing operating margin by 1.76 percentage points year on year and 2.36 percentage points sequentially. The presentation flags an oversupplied crude market and weak downstream chemical margins due to oversupply.
Two consecutive quarters of margin decline
Operating margin has fallen from 18.02% in Q2FY26 to 17.37% in Q3FY26 and 15.01% in Q4FY26, making this the second straight sequential decline. Year-on-year, interest expense increased 6.99% and the tax rate rose 1.44 percentage points to 24.22%, pushing profit before tax down 7.21% and net profit down 8.94%. Other income contributed 16.27% of profit before tax, so reported earnings also included a meaningful non-operating component.
Margin stayed above the Energy peer median
Reliance's 15.01% operating margin was 0.42 percentage points above the 14.59% median for the 15 Energy peers that had reported the same quarter. That relative position did not prevent sequential deterioration, with operating profit down 4.08% even as revenue increased 11.01%.
Management outlined the next expansion legs
Management said it is targeting 20 GWp of annual, fully integrated solar PV manufacturing capacity within the next few quarters and is scaling battery manufacturing to 100 GWh, with the first 40 GWh phase expected to be commissioned this year. The company told analysts that work on the Kutch renewable project, designed for more than 150 GWp of installed capacity, is progressing and that installations are planned in the next few quarters. Management also said its green ammonia supply agreement with Samsung C&T starts in 2029 and runs for 15 years.
The market reaction was ordinary by Reliance's history
The stock gained 2.86% on the first trading day after the results and was up 10.23% after five trading days, before giving back to a 0.38% decline after 15 trading days and a 5.20% decline after 30 trading days. Across the last eight results, it rose three times and fell five times, with a median absolute move of 3.21%, so the initial gain was within its usual range.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,94,059 cr | ₹2,64,905 cr | +11.01% | +12.50% |
| Other income | ₹4,420 cr | ₹5,037 cr | -12.25% | -13.03% |
| Expenses | ₹2,49,918 cr | ₹2,18,887 cr | +14.18% | +14.88% |
| Operating profit | ₹44,141 cr | ₹46,018 cr | -4.08% | +0.70% |
| Operating margin (%) | 15.01% | 17.37% | — | — |
| Interest | ₹6,585 cr | ₹6,613 cr | -0.42% | +6.99% |
| Depreciation | ₹14,808 cr | ₹14,622 cr | +1.27% | +9.86% |
| Profit before tax | ₹27,168 cr | ₹29,820 cr | -8.89% | -7.21% |
| Tax | ₹6,579 cr | ₹7,530 cr | -12.63% | -1.35% |
| Net profit | ₹20,589 cr | ₹22,290 cr | -7.63% | -8.94% |
| EPS (₹) | ₹12.54 | ₹13.78 | -9.00% | -12.55% |
Operating margin of 15.01% compares with a Energy sector median of 14.59% across 15 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.86% | +2.05% |
| Next session | +4.60% | — |
| 5 sessions | +10.23% | +9.66% |
| 15 sessions | -0.38% | — |
| 30 sessions | -5.20% | — |
Volume on the results session was 1.21× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Average monthly active users reached approximately 500 million, growing 10% quarter on quarter.
Guidance & outlook
- The company targets 20 GWp of annual, fully integrated solar PV manufacturing capacity within the next few quarters.
- The company is scaling annual battery manufacturing capacity to 100 GWh and expects to commission its first 40 GWh phase this year.
- The company plans to begin renewable energy installations at Kutch in the next few quarters.
- A green ammonia supply agreement with Samsung C&T starts in 2029 for 15 years.
Expansion
- The company has commissioned and operationalised multiple solar PV module and cell manufacturing lines.
- The company is adding high-speed bottling lines across multiple greenfield plants in 12 states.
- The company is developing Food Parks with high-speed, multi-category production lines to drive scale efficiencies.
- The company is scaling battery manufacturing capacity to 100 GWh, with a first 40 GWh phase planned this year.
- The company is developing a 150 GWp-plus renewable energy project at Kutch and ramping up evacuation capacity to Jamnagar.
New initiatives
- Jio launched Tadka, a micro-content hub with 100 shows at launch.
- JioMart launched the Fayda Kamao brand campaign to strengthen its value and savings positioning.
Problems & risks
- The crude market remained oversupplied through most of FY26.
- Downstream chemical margins were weak because of oversupply.
What to watch
- Whether consolidated operating margin recovers from 15.01% after its sequential decline from 17.37%.
- Whether other income remains near 16.27% of profit before tax.
- Progress toward the 40 GWh first battery-manufacturing phase that management said is expected this year.