RIL faces core growth plateau; pins hopes on solar and AI pivot

The third-quarter financials of Reliance Industries (RIL) , India’s largest company by market value, underline the fact that the company urgently needs a breakout moment to move to the next level of growth. The conglomerate’s key businesses—telecom, retail and refining—have entered a saturation phase, with expansion slowing and most year-on-year (YoY) growth stuck in the mid-single digits.

Jio’s customer base has seen better incremental additions than peers, posting a YoY growth of 6.9% to 515.3 million, aided by continued subscriber migration from the financially stressed Vodafone Idea. Jio’s average revenue per user (ARPU) increased 5.1% to ₹213.7. A tariff hike remains the only lever to drive a meaningful jump in ARPU from here. Still, the combination of subscriber additions and ARPU growth helped Jio Platforms Ltd (JPL) post an 11.2% increase in profit to ₹7,629 crore in the October–December quarter, while operating revenue grew 12.7% to ₹37,262 crore.

In the case of Reliance Retail, store additions have clearly plateaued. The number of stores rose just 4.6% YoY to 19,979. In March 2025, the company operated 19,340 stores. Meanwhile, management has shut several non-performing outlets while adding new ones, resulting in largely stagnant overall numbers. There has been no increase in cumulative store area over the past year. Reliance Retail Ventures Ltd (RRVL) posted a modest 2.7% rise in profit to ₹3,551 crore. This was attributed to the unbundling of the FMCG business from RRVL and its conversion into a subsidiary of the parent, RIL. Operating revenue of RRVL increased 9.2% to ₹86,951 crore in Q3.

Refinery throughput has been witnessing prolonged stagnation. Throughput rose 2%, while production meant for sale increased just 1.7% YoY. Revenue from RIL’s oil-to-chemicals business grew 8.4% to ₹1,62,095 crore, even as exports declined 1.2%. Earnings before interest, tax, depreciation and amortisation (EBITDA) recorded a robust 14.6% growth to ₹16,507 crore, driven by a sharp rise in demand for transportation fuel cracks. Expansion of fuel retailing is also back in focus. Reliance BP Mobility Ltd (RBML)—operating under the Jio-bp brand—runs a nationwide network of 2,125 outlets, up from 1,865 a year ago.

On the oil and gas exploration and production front, declining output remains a concern. Natural gas production from the flagship KG Basin assets fell 9.8%, leading to an 8.4% drop in revenue to ₹5,833 crore in Q3. EBITDA declined 12.7% to ₹4,857 crore, with margins contracting by 410 basis points.

Despite the slowdown across core business areas, RIL continues with its aggressive capital expenditure programme, spending ₹1.04 lakh crore in the first nine months of FY26, compared with ₹95,066 crore in the corresponding period of FY25. Net debt stood at ₹1.17 lakh crore, supported by cash and cash equivalents of ₹2.3 lakh crore. Consolidated net profit rose 1.6% to ₹22,290 crore in Q3, while revenue increased 10% to ₹2,93,829 crore.

The stagnation has been reflected in the stock price as well, which has risen just 23.4% since January 2022. In contrast, between 2017 and 2021, the share price had surged by more than 350%.

As growth stagnation looms across legacy and new-age businesses, RIL chairman Mukesh Ambani is placing his bets on a new set of engines—solar energy and artificial intelligence. “Reliance is entering a new phase of value creation with its initiatives in the AI and New Energy domains,” he said in the results statement. Ambani expressed confidence that RIL would play a pioneering role in the evolution of these epoch-defining technologies, delivering sustainable solutions at scale.