Few years back, Mr. Mukesh Ambani had boldly stated at the AGM that digital and retail would drive the future of RIL. At that time, it was seen more a vision statement. It is turning out to be true!
Underplaying traditional oil
In a sense, Reliance was ahead of the pack to see the end of traditional oil happening much faster.Reliance industries ltd share price As the world is turning away from fossil fuels, Reliance is perfectly aware that oil refining can no longer be the core focus. That is why Reliance started leveraging the massive cash flows generated by oil refining to grow its retail and digital business. In the years to come, oil would still be of relevance; but the focus would be on downstream chemicals and new energy; including batteries and green hydrogen.
Telecom is in a sweet spot
Telecom and digital are in a sweet spot for Reliance Industries.Oil refining industry in india Bulk of capex in telecom is done and dusted. Hence, any increase in ARPUs from these levels, is a direct reflection on the bottom line and also on the valuations of the telecom & digital vertical. Jio Telecom is getting very close to 500 million users and total market revenue share of over 50%. This is likely to get a further boost from the rapid rollout of Jio AirFiber. With ARPUs well below that of Bharti Airtel, there is room for tariff hikes. Telecom EBITDA is all set to grow at a CAGR of 23% in the next couple of years; a truly bright spot.
Retail clean-up should help
In the previous fiscal FY25 alone, the Reliance Retail franchise closed nearly 2,100 underperforming stores. Reliance telecom in india That is likely to be value accretive to growth in the coming years. It would now be able to focus on qualitative growth and also on ensuring that same store sales are optimized. Brokerages like Bernstein expect Reliance Retail to grow EBITDA at over 20%, which should be able to sustain growth and valuations in the coming years. Among the big plans in the next two years are a massive and focused expansion of floor space, as well as a big boost to quick commerce. These will surely boost SOTP valuations.
Future of RIL is about big data
While oil refining will still be a cash cow and green energy will be futuristic in nature; the real thrust will be leveraging big data. NSE It already is sitting on a gold mine of data in its retail and its telecom businesses. The company successfully has managed to cross fertilize the data of both these businesses for growth. Reliance telecommunications share price The next big challenge would now be to use the big data and leverage it for the financial services JV with Blackrock. That is an area where retail penetration is still quite low and RIL is sitting on a massive India-representative database. As Mukesh Ambani said, “Data is the new oil;” and nobody is leveraging data better than Reliance Industries. Time for more exciting things to come in! reliance telecom in india
