With shares already up 21% year-to-date after eroding wealth in 2024, the market is betting big on Ambani‘s ability to reignite growth across his sprawling empire across the three core engines of refining, telecom and retail segments.
Retail Revival
The retail segment stands as the most watched battleground this quarter, with analysts forecasting a dramatic reversal of fortunes. After months of disappointing performance due to store closures and operational streamlining, Reliance Retail is expected to roar back with EBITDA growth of 15-21% year-on-year.”Reliance’s retail segment should show 17% top-line growth in F26. Traction in new fashion brands, in-house consumer brands, and quick commerce are key catalysts,” Morgan Stanley analysts noted.
The transformation is already showing early signs. Goldman Sachs expects retail EBITDA growth to “accelerate further from 9%/15% YoY in 3Q/4QFY25 to 19% in 1QFY26E driven by continued focus on quick commerce in grocery through JioMart’s 30-minute delivery service.”
Revenue per square foot is expected to grow around 20% year-on-year, indicating improved store productivity after the painful restructuring. The company is also expected to add approximately 250 stores this quarter following aggressive closures in the previous year. Quick commerce expansion through JioMart’s 30-minute delivery service is anticipated to drive significant growth in the grocery segment, though some concerns exist about fashion & lifestyle performance due to the Eid shift impact on apparel sales.
With retail accounting for roughly 45% of Reliance’s enterprise value, Goldman Sachs warns that “a rerating of implied multiples for this business can be the largest driver of stock.”
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Jio’s Subscriber Explosion
Reliance Jio is preparing to deliver what could be its strongest quarterly performance, with analysts projecting subscriber additions of 6-10 million compared to a paltry 6 million for the entire FY25.
“Jio has added 2.6m mobile subscribers in April 2025, as per the latest TRAI data,” CLSA reported. “The addition to broadband subscribers (including AirFiber) will be over and above this, which could result in c.9-10m subscriber additions in 1Q versus 6m in all four quarters of FY25.”
The revenue implications are significant. ARPU is expected to climb to Rs 209-210 from Rs 206 in March, driven by tariff hikes and premiumization strategies. Goldman Sachs forecasts “strength in telecom earnings is broadly well expected in our view which is led by growth in subscribers (7 mn adds in 1QFY26E) and further ARPU expansion QoQ.”
EBITDA margins are expected to improve to 53-54% from 52.8% in Q4FY25, reflecting better operational efficiency and the residual impact of July 2024 tariff hikes. The market will closely watch for evidence of 5G monetization progress and enterprise revenue growth, along with acceleration in the high-margin fixed wireless broadband segment.
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O2C Segment: Navigating Turbulent Waters
The oil-to-chemicals business presents a tale of two forces: surging margins battling operational disruptions. Despite refinery maintenance shutdowns in April, the segment is expected to deliver robust growth driven by improving global dynamics.
“Our GRM marker for Reliance flags a US$1.1/bbl QoQ gain, which bodes well for the O2C segment,” CLSA analysts highlighted, pointing to gross refining margins improving to $10-10.5 per barrel from $9.6 in Q4.
Goldman Sachs noted that “refined product markets tightened in 1Q on the back of planned/unplanned outages, lack of capacity growth as permanent closures in US and Europe offset slower ramp of new refineries.”
The petrochemical story remains mixed. While polymer margins showed some improvement quarter-on-quarter, analysts remain cautious about global supply-demand dynamics affecting the broader chemicals market. Throughput is expected to be impacted by the April refinery maintenance, with estimates suggesting a decline to around 16.2 million metric tons. However, favorable crude oil differentials from Middle Eastern suppliers and strong diesel cracks are expected to support overall margins.
New Energy: From Promise to Performance
While still nascent, Reliance’s new energy vertical is approaching crucial milestones that could validate Ambani’s billion-dollar bet on clean technology.
“New energy has started with a 1GW line and will be fully integrated with 10GW capacity by end-2026,” Morgan Stanley reported. “The next couple of years should bring lithium ion phosphate battery capacity expansion and progress in green hydrogen capacity expansion.”
The timeline is ambitious with 10GW fully integrated solar manufacturing expected by end-2025 and 30 GWh battery production commencing in 2026. The company is focusing on reducing costs by building scale in producing green hydrogen on 2,000 acres of land near Kandla, a port town in western India. Success here could reshape Reliance’s long-term growth narrative and provide a new pillar of growth beyond traditional oil and retail operations.
The Numbers Game: What Analysts Expect
The consensus paints a picture of broad-based recovery across all major segments. Consolidated EBITDA is expected at Rs 448-450 billion, representing a 15-16% year-on-year growth and 2-3% quarter-on-quarter improvement. Retail EBITDA is projected at Rs 64-67 billion with a strong 15-21% year-on-year growth, while Jio EBITDA is expected at Rs 179 billion, up 18-19% year-on-year and 3-4% quarter-on-quarter. The O2C segment is anticipated to deliver Rs 151-155 billion in EBITDA, showing 11-19% year-on-year growth despite flat to marginal quarter-on-quarter performance due to maintenance issues.
JP Morgan expects “RIL to report flattish earnings on a QoQ basis with an uptick in EBITDA compensated by lower other income, higher interest and DDA. This should, however, still imply a c.27% YoY improvement.”
An additional boost could come from exceptional gains, with Citi noting that “reported net income & net debt could benefit from an exceptional gain on account of sale of shares in Asian Paints totaling Rs 9500 crore.”
As Reliance prepares to report results later in the day, the market is pricing in a comprehensive turnaround story. The company trades at 12x one-year forward EV/EBITDA, in line with its five-year average, suggesting investors are cautiously optimistic but not euphoric.
“RIL shares have outperformed Sensex, but we note NAV discount remains below historical average,” Goldman Sachs observed, adding that “when the earnings growth is broader based across segments, we note NAV discount even turns into a premium.”
The quarter ahead will test whether Ambani’s restructuring gamble has paid off, with retail revival, telecom momentum, and refining recovery all needing to deliver simultaneously. For a conglomerate where “no single variable has a dominant impact on earnings,” according to JP Morgan, this broad-based recovery represents both the ultimate challenge and the greatest opportunity.
