1 month ago
Digital Services to Drive RIL's Growth
Reliance Industries (RIL) is expected to see significant growth in the coming years, driven mainly by its digital services.
Brokerages like Motilal Oswal and Systematix Institutional Equities predict that digital services will contribute around 85% to RIL's incremental Ebitda over FY26-28.
Jio Platforms, RIL's telecom arm, has been performing well, adding millions of subscribers and seeing a rise in average revenue per user (ARPU).
The company's oil-to-chemicals (O2C) business also showed strong performance in the June quarter.
However, there are concerns about the retail business, particularly the faster ramp-up of lower-margin hyperlocal businesses, which could impact overall margins.
Despite a 22.4% year-on-year decline in consolidated net profit for the June quarter, RIL's operating performance was ahead of market expectations.
Digital services expected to contribute ~85% to RIL's incremental Ebitda over FY26-28.
Jio Platforms added 8.9 million subscribers, taking the total to 533 million.
Jio's ARPU improved 3.3% to Rs 215.6.
O2C business revenue grew 30.4% year-on-year to Rs 2,01,803 crore.
RIL's Q1 net profit declined 22.4% year-on-year to Rs 20,946 crore.
- Who
- Reliance Industries (RIL)
- What
- Digital services and retail business growth prospects
- Where
- India
- When
- FY26-28
- Why
- To drive RIL's next growth phase
Optimistic View
Cautious View
Growth Drivers
Optimistic View
Digital services expected to contribute significantly to RIL's incremental Ebitda over FY26-28.
Cautious View
Faster ramp-up of lower-margin hyperlocal businesses could weigh on blended EBITDA margins.
Retail Business
Optimistic View
Retail business expected to revive with store expansion and scale-up of JioMart.
Cautious View
Retail fuel joint venture losses could offset stronger O2C earnings.
Key facts
- Digital Services Ebitda CAGR
- 19% over FY26-29
- Jio Subscribers
- 533 million
- 5G Subscribers
- 285 million
- Jio ARPU
- Rs 215.6
- RIL Q1 Net Profit
- Rs 20,946 crore
- O2C Revenue Growth
- 30.4% year-on-year
- O2C Ebitda Growth
- 17.2% year-on-year
Quotes
Systematix Institutional Equities
A brokerage firm
“"Digital Services is likely to remain the biggest growth driver, contributing ~85% to RIL’s incremental consolidated Ebitda over FY26-28."”
financialexpress.com
“"The combination of higher data usage, better monetisation and operating leverage keeps 'telecom' among RIL’s strongest earnings engines."”
financialexpress.com
Sources
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