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Synopsis: A Reliance Group renewable energy company reported a sharp 91% year-on-year decline in net profit in Q3 FY26, even as revenues grew and quarterly performance improved sequentially. The earnings were weighed down by exceptional arbitration losses, but management remains confident, revising FY26 order inflow guidance to over ā¹11,000 crore amid strong execution momentum and global renewable project wins.
Shares of a Reliance Group renewable energy firm are in focus after the company reported a mixed Q3 FY26 performance, marked by a sharp year-on-year profit decline but a notable quarter-on-quarter turnaround supported by revenue growth and rising order inflows.
The company operates as a global, end-to-end solar engineering, procurement and construction (EPC) solutions provider and plays a key role in Relianceās broader clean energy ambitions.
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For the quarter ended December 2025, the company reported revenue from operations of ā¹2,092 crore, registering a 14% year-on-year growth compared to ā¹1,837 crore in Q3 FY25. On a sequential basis, revenue increased by 20% quarter-on-quarter, indicating improving execution momentum.
However, profitability remained under pressure.
Net profit for Q3 FY26 stood at ā¹1.55 crore, sharply lower than ā¹17.14 crore in Q3 FY25, reflecting a steep 91% YoY decline. That said, the company delivered a significant QoQ turnaround, swinging from a net loss of ā¹478 crore in Q2 FY26 to marginal profitability.
| Metric | Q3 FY26 | Q3 FY25 | YoY Change |
|---|---|---|---|
| Revenue (ā¹ crore) | 2,092 | 1,837 | +14% |
| Net Profit (ā¹ crore) | 1.55 | 17.14 | -91% |
| QoQ Performance | Turnaround | Loss in Q2 | Positive |
The sharp decline in profitability was primarily driven by exceptional losses linked to arbitration proceedings involving the companyās US subsidiary.
During earlier quarters, the subsidiary had terminated a subcontractor agreement due to execution delays and performance failures. The company had initially expected to recover ā¹485.64 crore from the subcontractor. However, the arbitral tribunal ruled against the subsidiary, instead awarding the subcontractor ā¹57.85 crore plus interest, along with additional legal costs of ā¹30.84 crore.
As a result, the company recognised exceptional losses totaling ā¹610.94 crore for the nine months ended December 31, 2025, significantly impacting reported profits.
Despite the profitability setback, core operations remained resilient.
This reflects steady demand for large-scale renewable infrastructure projects globally.
Management has reiterated confidence in growth visibility.
Key strategic wins include:
As of September 2025, Reliance New Energy Limited held a 32.49% stake, underscoring the companyās strategic role in Relianceās clean energy roadmap. While the stake has reduced from 40% in December 2022, Reliance remains a key long-term sponsor.
The company operates across 28 countries, with a renewable portfolio exceeding 26 GW, along with an O&M portfolio of 10.1 GW.
With a market capitalisation of around ā¹4,626 crore, the stock closed at ā¹198.15, down 2.2% on the day. Over the past five years, the stock has corrected over 24%, underperforming the NIFTY 50, which delivered nearly 78% returns in the same period.
While arbitration-related losses have distorted near-term earnings, analysts highlight that execution momentum, order visibility and global diversification remain intact.
Key monitorables ahead:
Q3 FY26 reflects a reset quarter rather than structural weakness. Exceptional losses have impacted reported profitability, but operational recovery, rising order inflows and strategic backing from the Reliance Group provide long-term visibility.
For investors, this remains a high-risk, high-reward renewable energy play, where sustained execution and margin normalisation will be key drivers going forward.
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