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Reliance Industries Ltd

| RIL Q3 2025-2026 Media & Analyst Call Transcript

BULLISH SENTIMENT

Report Source

⬤18th Jan 26

Summary : Reliance Industries demonstrates strong Q3 performance across diversified businesses, driven by robust consumer growth, 5G expansion, and progress in new energy, despite some commodity price and retail sector headwinds.

Management Perspective positive : Management consistently highlighted strong growth, market leadership, successful execution, and strategic advantages across all segments, despite some headwinds. The CFO emphasized 'very strong performance, continuing strong performance' and 'very constructive about growth rates'.

Concall Report Analysis & Insights

Business Overview

  1. Consumer businesses added 9 million customers, reaching 515 million total.
  2. Retail revenue grew 8%, with 20,000 stores and 430 new additions.
  3. FMCG turnover exceeded 5,000 Crores, up 60% year-on-year post-demerger.
  4. Jio Platforms achieved 515 million subscribers, adding 8.9 million net adds.
  5. O2C segment saw 15% EBITDA growth driven by strong transportation fuel demand.

Future Growth Prospects

  1. Jio aims to expand 5G user base and fixed broadband connections to 100 million homes.
  2. Retail is scaling quick commerce, targeting second largest QC player position.
  3. FMCG plans to double beverage capacity and establish multiple food parks.
  4. New Energy is commissioning 10-gigawatt integrated solar manufacturing, scaling to 20-gigawatt.
  5. O2C focuses on domestic market expansion and project execution for Vinyl and PTA.

Management Insights

  1. Diversified businesses are highly profitable, generating significant cash flow.
  2. Jio's proprietary technology and 5G deployment drive strong customer additions and data consumption.
  3. Reliance Retail is building a formidable omni-channel, multi-format position.
  4. O2C benefits from high-quality assets and flexible feedstock sourcing.
  5. New Energy ecosystem offers advantages against geopolitical challenges and supply chain issues.

Signs of Skepticism

  1. Management did not quantify quick commerce cash burn, only stating positive contribution margin.
  2. Specific financial contribution of enterprise services was not disclosed.
  3. Details on the revised capex plan for 100-gigawatt battery capacity were not provided.
  4. Management did not quantify power needs for the polysilicon plant.
  5. Retail growth volatility was downplayed as 'extremely short-term' without clear forward guidance.

Risk Factors

  1. Muted downstream petrochemical performance impacted O2C profitability.
  2. E&P EBITDA was lower due to reduced volumes and gas prices.
  3. Retail margins impacted by festive offers, quick commerce investments, and new labor code.
  4. TV ad market remains challenging due to FMCG and consumer electronics spend cuts.
  5. Geopolitical tensions and oversupply contribute to commodity price volatility.

Good To Know

  1. S&P upgraded RIL's credit rating from BBB Plus to A Minus.
  2. Jio has 65% share of 5G subscribers in India, with 53% of network traffic on 5G.
  3. FMCG demerger was effective December 1st, impacting retail revenue comparisons.
  4. JioHotstar achieved record ad revenues and 40% digital watch time growth.
  5. New Energy facilities are designed for 20-gigawatt capacity, allowing modular expansion.

Key Drivers

  1. 5G deployment drives subscriber and data growth.
  2. New Energy gigafactories commissioning for solar.
  3. Retail quick commerce scaling, expanding market reach.
  4. O2C domestic market focus, strong fuel demand.

Key Analyst Discussions

Competitive Environment

  1. Jio's ARPU growth is organic, driven by offerings and customer mix, not tariff hikes.
  2. Jio's 5G ramp-up is due to network quality and standalone architecture.
  3. New energy polysilicon production aims to be competitive by optimizing power costs.
  4. Jio offers AI cloud services, leveraging Reliance Intelligence and partner collaborations.
  5. Retail's quick commerce leverages its store network for efficient delivery.

Market Trends & Consumer Behavior

  1. Festive demand split between Q2 and Q3 affected retail's Q3 year-on-year growth.
  2. Gold price increase drove 73% average bill value growth in jewels business.
  3. Consumers are using old gold for exchange more due to high gold prices.
  4. Domestic oil demand is robust, driven by personal mobility and manufacturing.
  5. Prolonged monsoon muted demand for PET and PVC products.

Financial Highlights

  1. Retail revenue growth was impacted by GST rationalization and RCPL demerger.
  2. Quick commerce is contribution margin positive, leveraging existing store network.
  3. Q3 capex was Rs.34,000 Crores, allocated across O2C, new energy, Jio, and retail.
  4. Labor code impact on retail EBITDA is not material, adding few percentage points to growth.
  5. New energy capex is largely committed, with generation starting in 12-15 months.

Product Composition

  1. O2C maximized gasoline production due to better economics.
  2. Petrochemical capacity is three-fourths gas-based (ROGC/ethane) and one-fourth naphtha-based.
  3. Jio is adding more services and offerings, like Google Gemini Pro, to 5G users.
  4. Retail is expanding catalog and launching new products in fashion categories.
  5. FMCG is building comprehensive portfolio with acquired brands and new launches.

Strategic Considerations

  1. Jio IPO is awaiting final government notification, expected in next few months.
  2. DC-to-DC connectivity is provided by RJIL, leasing dark fiber from JDFPL.
  3. Jio Cloud infrastructure capex is incurred by RIL or Reliance Intelligence, JPL provides services.
  4. New energy generation capacity will primarily serve captive requirements and green fuel exports.
  5. Jio's fixed broadband capex per incremental subscriber is lower due to larger base.
Reliance Industries Ltd (RELIANCE) Concall Report Analysis & Insights | Dhanarthi