---
endpoint: analytics
pattern: Energy
status: done
latency_ms: 338979
conversation_id: b4de543f-c9c2-4d97-8827-25f740dccf58
citations: 24
created: 2026-05-31 20:56:34Z
---

# Provide a one‑year narrative of Reliance Industries, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Reliance Industries (RELIANCE-IN): A One-Year Narrative (June 2025 → May 2026)

Over the past twelve months, Reliance Industries traversed a near-textbook regime shift — from a consumption-led, multi-business operator gaining tech-conglomerate credentials, to an energy-heavy operator absorbing a once-in-a-decade geopolitical oil shock — yet exiting the period with the strongest credit profile in its history and a Jio Platforms IPO finally on the runway. The narrative below traces how that journey reshaped investor sentiment quarter by quarter.

---

## 1. The Setup (Mid-2025): "Triggers Ahead" Frame Around Consumer Re-Rating

Entering the year, the sell-side narrative was unmistakably bullish on **consumer optionality** (Retail + Digital scaling), with energy seen as a stable cash funder. CLSA's June 2025 dedicated note on RIL — titled **"Reliance Industries — O-PF (Triggers ahead)"** (24-Jun-2025) — captured the prevailing buy-side mood: a 106-chunk thesis built around upcoming catalysts: a Jio tariff hike, FMCG scale-up, and new-energy commissioning.

That bull thesis was promptly validated.

### Q1 FY26 (quarter ending Jun-25; reported 18-Jul-2025) — The Asian Paints Quarter
- **Consolidated revenue Rs 273,252 cr (+6.0% YoY); EBITDA Rs 58,024 cr (+35.7% YoY); PAT Rs 30,783 cr (+76.5% YoY)** [1]
- The headline PAT was juiced by a one-time **Rs 8,924 cr gain on the sale of the Asian Paints stake** [2]. Stripping that out, recurring EBITDA was +15% and recurring PAT +25% — still genuinely strong.
- **Jio**: 498 mn subs, 210 mn 5G users, 24% YoY EBITDA growth, **52% EBITDA margin and 45% revenue market share** in connectivity [4].
- **Retail**: +11% revenue, +13% EBITDA — recovery from FY25's "streamlining" weakness was confirmed.
- **O2C**: EBITDA +11% on strong fuel cracks and ethane feedstock advantage; Jio-bp pushing volumes (diesel +34%, petrol +32% domestic placement).
- **Balance sheet**: Net debt held at Rs 117,581 cr, **Net Debt/LTM EBITDA at 0.59x — well inside the <1.0x discipline frame** [3]; capex Rs 29,875 cr ($3.5 bn); ratings BBB+ (S&P) / Baa2 (Moody's).

**Market read**: This was the quarter that locked in the "non-energy now > 50% of EBITDA" frame and revived discussion of a Jio IPO catalyst. Sentiment was at its peak.

---

## 2. The Reinvention Narrative (Q2 FY26, Jul–Sep 2025) — RIL Pivots Hard Into AI

The quarter reported on 17-Oct-2025 was less about the print and more about **strategic identity**. The CFO framed it as quality numbers "improving quarter after quarter" — but the real news was structural:

- **Reliance Intelligence** was carved out as a **100% RIL subsidiary**, with a **70/30 joint venture with Meta** to develop enterprise AI solutions [5]. CapEx commitment: a Google Cloud-anchored GPU/DC project escalating to ~100 MW over two years.
- **JPL EBITDA Rs 18,757 cr (+18% YoY)**; subscriber base crossed **506 million**, 22 mn home connects, 52% margin.
- **Media (JioStar)**: revenue Rs 6,179 cr, **EBITDA margin 28.1%** — described internally as "gold standard within entertainment" [6]; Bigg Boss watch-time +54%, JioHotstar declared the #1 sports platform in India.
- **Retail**: gross revenue +18% YoY, net +19%; partnerships added with Stella McCartney and Max & Co; JioMart quick-commerce live in 5,000 pin codes / 1,000+ cities.
- **GST rationalisation** (effective 22-Sep-2025) was passed through to consumers cleanly and re-accelerated polymer and downstream-consumer demand.
- **New Energy**: solar PV cell giga-factory line at Jamnagar imminent; 40 GWh BESS construction in progress; Kutch RE-RTC site (5.3 lakh acres) advancing — the long-promised "Jio-like disruption in energy" started moving from PowerPoint to plant.

**Investor implication**: The Economist would later (May-2026 print) ask **"Can Reliance Reinvent Itself as a Tech Conglomerate?"** — the answer the market gave in Q2 was *yes, and we'll re-rate it accordingly*. Consumer-business multiples were applied generously to JPL.

---

## 3. The Credit Crown (Q3 FY26, Oct–Dec 2025) — S&P Upgrades to A-

If Q2 was the strategic apex, Q3 (reported 16-Jan-2026) was the **financial validation**.

### Headline Numbers
- **Revenue Rs 293,829 cr (+10.0% YoY); EBITDA Rs 50,932 cr (+6.1% YoY); PAT Rs 22,290 cr (+1.6% YoY)** [7].
- **9M FY26 cumulative**: Revenue Rs 850,629 cr (+8.6%), **EBITDA Rs 159,323 cr (+18.3%), PAT Rs 75,165 cr (+28.1%)** — clean double-digit operating growth [8].
- Net debt Rs 117,102 cr; **Net Debt/LTM EBITDA dropped to 0.56x**.

### Segment Mix
- **Jio EBITDA +16.4%**; 515 mn subs (+8.9 mn net adds in Q), 253 mn 5G users, **25 mn fixed broadband connects** crossed; **170 bps margin expansion**.
- **O2C EBITDA +14.6%** on strong fuel cracks (+60–100%) — Russia-Ukraine drone hits on refineries had already begun tightening product markets.
- **Retail EBITDA +1.3%** only — the first crack in the consumer narrative. Quick-commerce scaling (1.6 mn daily orders, on track for #2 in India) was carrying low margins [11].
- **RCPL (Reliance Consumer Products) demerger** became effective 01-Dec-2025; 3QFY26 FMCG gross revenue Rs 5,065 cr (+60% YoY) as a standalone reporting entity.

### The Standout Event: Credit Rating
**S&P upgraded RIL from BBB+ to A-** (two notches above India's sovereign rating), citing: (i) higher consumer-business contribution improving earnings stability, and (ii) earnings growth outpacing capex for 12–24 months. RIL became the **first Indian manufacturing company with an international rating of A- or above** [9]. This had immediate spread-narrowing implications and unlocked new institutional debt-investor pools.

### The "Tech Conglomerate" Stamp
The Google Gemini distribution deal landed in Q3: **18-month Gemini Pro plan (Rs 35,100 retail value) free for unlimited Jio 5G users** [10]. Combined with the Meta JV, RIL had now lined up partnerships with the two AI hyperscalers most exposed to India's consumer internet. Re-rating arguments became hard to dismiss.

---

## 4. The Shock (Q4 FY26, Jan–Mar 2026) — Strait of Hormuz Crisis Reprices Everything

What looked like a smooth glide toward a Jio IPO disclosure ran into a wall in **March 2026**. The CFO's own framing was striking: the first 11 months of FY26 were a "fastest-growing economy" story with stable energy prices; March looked like an entirely different year.

### The O2C Catastrophe
A renewed **Iran/Middle East conflict** triggered a Strait of Hormuz disruption that hit refining and petchem on every dimension simultaneously:
- **Dubai crude surged to $168/bbl** — described by management as "never before kind of a price"; **LNG briefly hit $27/MMBTU** [12].
- ~**3 million bbl/day of Middle East refining capacity** went offline; **QatarEnergy declared force majeure** on its 77 mn t LNG operation; Naphtha and ethylene supplies into Asian crackers collapsed.
- **Crude premiums of $20–$30/bbl** over benchmarks, **freight rates 10–15× normal**, and surging insurance costs effectively **decoupled headline cracks from realized margins** for non-integrated refiners [17].
- The Indian government **reintroduced SAED** (windfall tax) on diesel exports in two tranches, and **reallocated KGD6 gas to City Gas Distribution** at the $8.9/MMBTU ceiling, capping upstream realizations.
- RIL's refinery throughput was **19.5 Mt vs 20.3 Mt YoY**; the price impact was the binding constraint, not the volume.
- **SAED reintroduction** added a discount layer on domestic placement [16].

### Reported Q4 (released 24-Apr-2026)
- **Q4 EPS Rs 12.54 vs FactSet consensus Rs 15.31** — a ~18% miss.
- **Pretax income Rs 271.95 bn vs FactSet Rs 306.46 bn**.
- **Q4 EBITDA margin 14.9% vs Street 16.7%** [21].
- **Segment EBITDA**: O2C Rs 145.2 bn (-3.7% YoY), Oil & Gas Rs 41.95 bn (-18.1% YoY), Retail Rs 69.21 bn (+3% YoY), Digital Rs 200.4 bn (+16% YoY) [21].
- **Dividend Rs 6.00/share** recommended.

### The Other Side of the Story (Consumer Resilience)
- **Jio added 36.3 mn subs in FY26 to 524 million; 5G base added 77 mn to 268 mn**; Home subs +10 mn to 27 mn (75% via AirFiber) [13].
- **Retail Q4 revenue Rs 98,000 cr — highest ever — EBITDA Rs 6,900 cr, PAT Rs 3,500 cr; +11% YoY (+14% adjusted for RCPL demerger)** [14]. Margin was the weakness (mix shift to low-margin QC).
- **JioStar reached 550 mn MAU in March; T20 World Cup set a world record at 72.5 mn concurrent streams** (prior record 65 mn) [15].
- **FMCG**: Campa beverages revenue Rs 4,700 cr — now India's 4th-largest carbonated soft drink brand; Independence brand Rs 2,600 cr [18].

### Market Reaction
Counter-intuitively, **the stock closed +2.9% the next session (vs Nifty +0.8%)** [19] — the market separated cyclical O2C weakness from the more durable consumer/digital franchise and chose to look through. However, RIL had **underperformed Nifty (-7.1% vs -4.6%) since the Jan-14 Q3 close**, reflecting accumulated O2C de-rating ahead of the print.

---

## 5. Sentiment Reset & Sell-Side Reactions (Post Q4)

The sell-side response captured the cognitive shift:

| Broker | Action | New TP | Old TP | Stance |
|---|---|---|---|---|
| Goldman Sachs (Nikhil Bhandari) | Maintained | Rs 1,910 | Rs 1,910 | Buy [19] |
| JPMorgan (Sanjay Mookim) | Maintained | Rs 1,675 | Rs 1,675 | Overweight [19] |
| Nomura (Bineet Banka) | Cut | Rs 1,640 | Rs 1,700 | Buy [19] |
| Ambit (V. Subbaraman) | Cut | Rs 1,584 | Rs 1,680 | Buy [19] |
| Elara Capital (Gagan Dixit) | **Upgraded** | Rs 1,619 | Rs 1,717 | Buy (from Accumulate) |

- **Sell-side ratings (29 brokers): Buy 97% / Hold 0% / Sell 3%; average target Rs 1,689 (implying ~22% upside from print day)** [19].
- **Valuation post-Q4**: NTM P/E **21.2x vs 5-yr avg 22.0x**; EV/EBITDA **9.9x vs 5-yr avg 11.0x** — a modest discount despite the O2C drag, validating the consumer-multiple thesis.

The dominant analyst framing — even after the miss — was: (i) O2C will normalise as the Middle East crisis fades and SAED unwinds; (ii) the **Jio IPO is the next major share-price catalyst**.

---

## 6. The IPO Pivot (May 2026) — Final Trigger Lands

In the closing weeks of the period:

- **11-May-2026**: Economic Times reported that the **Jio Platforms IPO structure was changed from an Offer-for-Sale to a fresh-issue (all new shares)** offering, with the **DRHP expected to be filed with SEBI within two weeks** [20]. Stock at Rs 1,435.70, up from Rs 1,327.65 on Q4 day — a clean ~8% post-result rally driven primarily by IPO-disclosure anticipation.
- **30-Apr-2026**: Reliance Retail acquired **Anomaly haircare brand** (founded by Priyanka Chopra) — another bolt-on for the premium beauty stack [22].
- **19-May-2026**: Reliance was reported in **talks with CATL** to acquire BESS (battery energy storage) components — confirming China-supplier dependency in the New Energy ramp despite indigenous giga-factory build-out [23].
- **20-May-2026**: Reliance, NTPC, Adani Power and Lalitpur Power announced **plans for INR 6.5 trillion of nuclear power investments in Maharashtra** — a new front in the energy-transition story, signaling RIL is positioning beyond pure-play solar/BESS [24].
- The Economist (14-May-2026 print) led its Business section with **"Can Reliance Reinvent Itself as a Tech Conglomerate?"** — symbolising that the AI/digital pivot was now the dominant external narrative.

---

## 7. What Shaped Sentiment and Valuation — Synthesis

| Phase | Period | Dominant Driver | Sentiment | Valuation Implication |
|---|---|---|---|---|
| **Setup** | Jun–Jul 2025 | Asian Paints one-time, recurring +25% PAT, Jio 52% margin | Bullish — "consumer >50% of EBITDA" frame locks in | Multiple re-rating bias; CLSA "Triggers Ahead" [1][2] |
| **Reinvention** | Oct 2025 | Reliance Intelligence formed; Meta JV; New Energy capex live | Bullish — "tech conglomerate" thesis | SOTP-driven valuation; JPL multiple expansion [5][6] |
| **Credit Crown** | Jan 2026 | S&P upgrade to A-; 9M PAT +28%; Gemini deal | Most bullish point of the year | Lower cost of capital; bond spread tightening [8][9][10] |
| **Shock** | Mar 2026 | Hormuz crisis; Dubai $168; SAED; KGD6 reallocation | Bearish on O2C; consumer narrative survives | Q4 EPS missed by 18%; sector de-rating mostly already in the price [12][16][17] |
| **IPO Pivot** | May 2026 | DRHP filing imminent; fresh issue not OFS | Re-emerging bull case | Post-Q4 rally; ~22% sell-side upside; Buy 97% [19][20] |

### Key Takeaways
1. **The defensive case is the credit case**: Even through a once-in-a-decade O2C shock, balance-sheet metrics improved (0.64x → 0.56x ND/EBITDA) and S&P upgraded. That removed downside-fear from the bear case.
2. **The bullish case is increasingly Jio-Platforms-listed-equity-as-a-standalone**: A pure-play 5G/FWA/AI distribution company at scale, with subscriber adds re-accelerating after a year of organic-only ARPU growth (FY26 ARPU +4% YoY with no tariff hike).
3. **The risk that re-emerged**: Retail margin compression is structural — quick commerce dilution is a multi-year mix-shift drag, not a one-quarter blip. This caps the upside-surprise vector that previously came reliably from Retail.
4. **The cleanest investor framing post-period**: 9.9x EV/EBITDA vs 5-yr avg 11.0x — the stock is being priced *as if* the O2C shock is permanent and the Jio IPO is uncertain. The market reaction to the IPO structure change suggests both views will be tested over the next six months.

---

**Sources**

[1][2][3] Reliance Industries Limited, Q1 FY26 Earnings Call & Presentation — 18-July-2025
[4][5][6] Reliance Industries Ltd., Q2 FY26 Earnings Call — 17-October-2025
[7][8][9][10][11] Reliance Industries Limited, Q3 FY26 Earnings Call & Presentation — 16-January-2026
[12][13][14][15][16][17][18] Reliance Industries Ltd., Q4 FY26 Earnings Call — 24-April-2026
[19] StreetAccount — Street Takeaways: Reliance Industries Q4 Earnings (28-Apr-2026)
[20] StreetAccount / Economic Times — Reliance plans Jio Platforms IPO as all-new-shares offering (11-May-2026)
[21] StreetAccount Metrics Recap — Reliance Industries Q4 Earnings (24-Apr-2026)
[22] StreetAccount — Reliance Retail acquires Anomaly haircare brand (30-Apr-2026)
[23] StreetAccount — Reliance in talks with CATL for BESS components (19-May-2026)
[24] StreetAccount — Reliance, NTPC, Adani, Bajaj plan INR 6.5T Maharashtra nuclear investments (20-May-2026)
Internal Research (RMS): CLSA — "Reliance Industries — O-PF (Triggers ahead)" — 24-Jun-2025 (607962717LinqAlpha.PDF)

## Citations

- [1] **Reliance Industries Limited, Q1 25/26** · external
- [2] **Reliance Industries Limited, Q1 25/26** · external
- [3] **Reliance Industries Limited, Q1 25/26** · external
- [4] **Reliance Industries Ltd., Q2 2026 Earnings Call, 17-October-2025** · external
- [5] **Reliance Industries Ltd., Q2 2026 Earnings Call, 17-October-2025** · external
- [6] **Reliance Industries Ltd., Q2 2026 Earnings Call, 17-October-2025** · external
- [7] **Reliance Industries Limited, Q3 25/26** · external
- [8] **Reliance Industries Limited, Q3 25/26** · external
- [9] **Reliance Industries Limited, Q3 25/26** · external
- [10] **Reliance Industries Limited, Q3 25/26** · external
- [11] **Reliance Industries Limited, Q3 25/26** · external
- [12] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [13] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [14] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [15] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [16] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [17] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [18] **Reliance Industries Ltd., Q4 2026 Earnings Call, 24-April-2026** · external
- [19] **Street Takeaways - Reliance Industries Q4 Earnings** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4643281&_doc_date=2026-04-28&_doc_product=SA>
- [20] **Reliance Industries now plans for Jio Platforms IPO to offer all new shares** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4671467&_doc_date=2026-05-11&_doc_product=SA>
- [21] **StreetAccount Metrics Recap - Reliance Industries Q4 Earnings** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4640274&_doc_date=2026-04-24&_doc_product=SA>
- [22] **Reliance Retail acquires haircare brand Anomaly** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4650541&_doc_date=2026-04-30&_doc_product=SA>
- [23] **StreetAccount Themes APAC Headlines (19-May)** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4686082&_doc_date=2026-05-19&_doc_product=SA>
- [24] **StreetAccount Themes APAC Headlines (20-May)** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4687625&_doc_date=2026-05-20&_doc_product=SA>

