RIL Petrochemicals Shine in FY26, Stumble on Q4 Margins

RIL Petrochemical Business Under Pressure in Q4 Despite Strong FY26 GrowthReliance Industries Limited (RIL) reported a steady performance in its petrochemical (Oil-to-Chemicals) segment for FY2025-26, though the business faced margin pressures during the fourth quarter amid global volatility.Petrochemical PerformanceThe company’s petrochemical segment recorded revenue of ₹6,62,401 crore for the full year, marking a 5.7% year-on-year growth. EBITDA stood at ₹60,546 crore, up 10.1%, supported by strong fuel cracks and operational efficiency across its integrated refining and petrochemical operations.However, the fourth quarter presented significant challenges. Revenue rose to ₹1,84,944 crore, reflecting a robust 12.4% YoY increase, but profitability declined. EBITDA fell 3.7% to ₹14,520 crore, while EBITDA margins dropped to 7.9%, highlighting pressure on earnings.According to the company’s downstream margin data, a sharp increase in naphtha prices (+13% YoY) significantly impacted polymer margins. Polypropylene margins declined sharply by 28%, while polyethylene margins fell by 4%. In contrast, polyester chain margins improved by 16%, providing partial relief.Global disruptions, particularly the Middle East conflict, led to higher crude prices, increased logistics costs, and supply chain challenges. These factors limited the company’s ability to fully benefit from strong fuel cracks.Domestic demand trends remained mixed but relatively stable. Demand for polyethylene (PE) and polypropylene (PP) grew modestly by around 3%, driven by sectors such as packaging, automotive, and appliances. However, PVC demand declined by 10% due to weaker infrastructure demand and lower imports. Polyester demand showed resilience, with PET growing by 5%, supported by the beverage sector.Despite the headwinds, Reliance leveraged its integrated business model, diversified crude sourcing, and operational flexibility to manage costs and maintain stable volumes. The company also benefited from favorable ethane cracking economics compared to naphtha-based production.Analysts note that while FY26 performance reflects strong structural strength, Q4 results underline the sensitivity of petrochemical margins to feedstock costs and global supply disruptions.Going forward, recovery in margins will depend on stabilization in crude prices, normalization of supply chains, and improvement in petrochemical spreads. Strong domestic demand and operational efficiency are expected to continue supporting the segment in the near term.Disclaimer:PolyMart does not offer guarantees regarding the accuracy, reliability, or completeness of the information provided on its platform. Users are advised to independently verify any data before relying on it for decision-making purposes.