RIL Q1: Digital & Retail Drive Growth | Can the Legacy Biz Keep Pace?

Stocks in News | Reliance Industries Ltd (RIL) reported a mixed bag of results for Q1 FY26. While legacy businesses like Oil & Gas and Oil-to-Chemicals (O2C) faced headwinds, strong growth from its digital and retail segments offset the impact. Following the announcement, shares of RIL slipped 3.2%, closing at Rs 1,428.60 on the National Stock Exchange (NSE).

Here's a detailed breakdown of how each business vertical performed and what lies ahead for the company.

Oil & Gas - Exploration and Production (E&P)

The upstream oil and gas segment faced challenges:

• Revenue: Fell 1.2% YoY due to a decline in KGD6 (Krishna-Godavari Basin) gas sales volume, lower CBM (Coal Bed Methane) gas prices and lower crude oil realization
• EBITDA: Down 4.1% YoY due to lower revenues and maintenance-related operating costs

Oil-to-Chemicals (O2C)

Mixed trends were seen in RIL’s O2C segment:

• Revenue: Down 1.5% YoY due to lower crude prices and a planned shutdown
• EBITDA Growth: 10.8% YoY
• Polyester Chain: Margins remained under pressure due to oversupply, offsetting some of the segmental gains.

Reliance New Energy

RNEL continued to build its clean energy portfolio:

• Solar Manufacturing: First line operational in Jamnagar’s 10 GW integrated solar module plant
• Bioenergy: 10 Compressed Bio Gas (CBG) plants set up with a total capacity of 195 TPD; aiming for 55 plants by year-end
• Battery Manufacturing: Developing a 30 GWh integrated battery facility
• Sustainability Target: Reduce overall energy consumption by 25% using in-house capabilities

Jio Platforms

Jio continued its strong momentum, posting impressive numbers:

• Revenue Growth: 19% YoY
• EBITDA Margin: Expanded by 210 basis points due to operational leverage and cost efficiencies
• ARPU: Average Revenue Per User jumped 14.9% YoY
• Subscriber Growth: 1.7% YoY increase

Reliance Retail Ventures

RRVL remained a bright spot in the overall results:

• Revenue Growth: 11% YoY
• EBITDA Growth: 13% YoY
• Net Profit: Surged 33% YoY aided by investment income
• Customer Growth: 13% YoY increase in registered customers
• Transaction Volume: Up 16% YoY
• Store Expansion: 388 gross and 252 net store additions in Q1

Summary: Jio and Retail Offset Weakness in Legacy Segments

RIL’s Q1 FY26 performance highlights the strength of its diversified business model. Jio continued to see growth in both ARPU and subscribers, while RRVL gained market share through new store openings and strategic partnerships. RNEL is advancing its green transition.

Although legacy segments like O2C and E&P faced cyclical challenges, they were offset by strong performance in the consumer-driven segments.

Outlook: Growth Drivers & Investment Potential

Reliance Industries is steadily transforming into a diversified consumer-tech-energy conglomerate. Several structural growth drivers are poised to support this transition:

1. Rural Recovery & Consumption Boost

A healthy monsoon outlook, combined with supportive government policies, is expected to drive rural consumption—a key lever for growth across RIL’s retail and telecom verticals.

2. Digital Expansion

Recent data from the Telecom Regulatory Authority of India (TRAI) reveals a slowdown in Airtel’s net subscriber additions, while Jio continues to gain market share, largely driven by its aggressive 5G expansion strategy. This emphasis on 5G is beginning to yield results.

With nearly 20 million premises now connected through fixed broadband and 7.4 million users on JioAirFiber—the world’s largest fixed wireless platform—its reach is unmatched. The launch of services like JioGames Cloud and the AI-ready JioPC further positions Jio at the forefront of India’s digital revolution.

3. Retail Growth & Strategic Alliances

The retail segment is expanding aggressively, supported by both organic growth and strategic moves. Notable developments include a partnership with Shein to strengthen its fashion portfolio and the acquisition of Kelvinator to enter the consumer durables market. A wider product range and deeper geographic reach continue to attract more consumers.

4. Energy Segment: Mixed Outlook

• O2C Challenges: The oil-to-chemicals business faces headwinds from global crude oversupply, margin pressures in polyester and increased dumping of oil derivatives.
• E&P Tailwinds: In contrast, the exploration and production segment is benefiting from rising natural gas demand, which is expected to support upstream volume growth.

Final Thoughts

Despite near-term challenges in its legacy business segments, RIL is on track to execute its strategic vision effectively. With strong growth in Jio and Retail, along with rapid scaling of RNEL, RIL is well-positioned to capitalize on structural trends in consumption, digitization and clean energy.

The company's diversification into consumer-facing businesses acts as a natural hedge against volatility in commodity-linked earnings. Additionally, its increasing focus on green energy—spanning renewables, bioenergy and battery storage—strengthens its long-term growth prospects.

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