Global rating agency S&P Global Ratings has indicated that Reliance Industries Ltd (RIL) could see a rating upgrade in the next 12 months. The optimism stems from the company’s expanding digital services and retail businesses, which are becoming stronger earnings drivers compared to its cyclical oil and gas operations.
S&P expects that the share of earnings from RIL’s domestically-focused businesses will rise to 60% by FY26, up from 45% in FY22. This shift, it noted, will make earnings more predictable and shield the company from global volatility.
Reliance Jio and Retail Lead the Growth Story
Reliance Jio Infocomm is expected to benefit significantly from higher tariffs and a growing subscriber base. S&P has projected Jio’s EBITDA growth of 15–17% in FY26, reinforcing its role as a major earnings contributor.
RIL’s Q1FY26 results already reflect this strength. The company reported an EBITDA of ₹58,000 crore, surpassing S&P’s estimates. The growth was supported by digital services, resilient oil-to-chemicals (O2C) earnings, and a one-time gain of ₹8,900 crore from selling a minority stake in Asian Paints.
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O2C Segment Shows Resilience
Despite global challenges, RIL’s O2C segment remains strong. For FY25, O2C EBITDA declined by only 12%, far better than the 20–45% drop seen across Asian peers. S&P expects only a modest 3–5% decline this fiscal, highlighting the strength of RIL’s complex refining operations and its firm position in India’s energy market.
Market Insights & Update
RIL’s steady shift toward consumer-facing businesses could improve investor confidence.
With digital and retail leading, reliance on cyclical O2C may reduce risk exposure.
Market analysts suggest a rating upgrade could lower RIL’s borrowing costs, aiding expansion.
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