RIL steps up investments across new ventures, however net debt declines

Reliance Industries (RIL), India's largest company by market capitalisation, has sustained its aggressive investment cycle across new energy, consumer businesses, digital commerce and artificial intelligence (AI), while leveraging its balance sheet less. The company spent more than ₹38,000 crore on capital expenditure in the September quarter, taking its first-half investments well above its net profit. However, its net debt declined marginally during the period.

RIL's capital expenditure stood at ₹38,153 crore in Q2 FY27, marginally lower than ₹38,682 crore in the preceding quarter and ₹40,010 crore a year earlier. However, the first-half outlay increased 9.9% year-on-year to ₹76,835 crore from ₹69,885 crore. The spending was primarily directed towards its oil-to-chemicals (O2C) business and new energy projects, besides expanding infrastructure and distribution networks for consumer businesses, said officials.

The biggest long-term bet is renewable energy, with RIL committing ₹1.5 lakh crore to establish five giga factories in Jamnagar. Solar PV cell and module manufacturing lines have been operationalised, with the company targeting 20GW of fully integrated annual capacity, covering the entire value chain from polysilicon to glass. Battery storage, green electricity and green chemicals are other focus areas. In Kutch, RIL is developing a renewable energy hub across 5,50,000 acres, targeting annual generation of more than 40 billion units of green electricity. The investments are part of its ambition to achieve net-zero carbon emissions by 2035.

Another growth engine is fast-moving consumer goods (FMCG). Within three years of its launch, Reliance Consumer Products Ltd (RCPL) has achieved gross revenue of ₹22,000 crore, doubling year-on-year, and expanded exports to 40 countries. RIL also plans to leverage its merchandise export capabilities to develop a multi-sector export hub, targeting $125-150 billion in exports by 2032.

AI is emerging as another strategic priority. Mukesh Ambani has established Reliance Intelligence to build AI infrastructure and platforms, with partnerships involving Google, Meta and NVIDIA. "Now, we are entering the next phase – Execution," said Akash Ambani, chairman of Reliance Jio Infocomm, at the company's recent AGM.

RIL has also entered military aviation through a proposed partnership with British engineering major Rolls-Royce to develop and manufacture combat engines for India's Advanced Medium Combat Aircraft programme.

Despite the investment push, RIL has been able to reduce its net debt marginally. Outstanding debt increased 4.1% sequentially to ₹3,84,952 crore at the end of September. However, cash and cash equivalents rose to ₹2,67,812 crore from ₹2,46,791 crore in June. Consequently, net debt declined 4.7% quarter-on-quarter to ₹1,17,140 crore from ₹1,22,914 crore. The net debt-to-EBITDA ratio improved to 0.47 from 0.57 in the preceding quarter.

The ₹30,188-crore Jio IPO has provided additional balance-sheet support. RIL used ₹27,500 crore of the proceeds to prepay, fully or partly, external commercial borrowings of Reliance Jio Infocomm. The balance is earmarked for general corporate purposes. Chairman Mukesh Ambani said disciplined capital allocation had helped create businesses capable of generating sustainable cash flows.

Higher fuel cracks and petrochemical margins support performance

RIL's consolidated gross revenue surged 27.8% year-on-year to a record ₹3,62,268 crore in Q2 FY27. EBITDA rose 23.9% to ₹62,409 crore, while profit after tax, including the share of profit from associates and joint ventures, increased 33.8% to ₹29,550 crore. The O2C business led earnings growth, with revenue rising 44.2% to ₹2,31,601 crore and EBITDA jumping 67.9% to ₹25,203 crore. Higher transportation fuel cracks and stronger downstream petrochemical margins supported performance.

Jio Platforms reported 11.4% revenue growth to ₹40,475 crore, while net profit increased 13.7% to ₹8,387 crore. Subscriber additions, higher average revenue per user and digital services growth supported earnings. Reliance Retail's gross revenue grew 6.4% to ₹91,716 crore. However, EBITDA declined 8.6% to ₹6,228 crore and profit fell 24.5% to ₹2,619 crore, reflecting input-cost inflation, digital commerce investments and the shift in the festive calendar to Q3.