RIL’s rating upgrade.
S&P Global Ratings has increased the credit rating of Reliance Industries Limited from ‘BBB+’ to ‘A-‘. The agency has also kept a stable outlook along with the rating. According to S&P, Reliance’s consumer-based businesses such as digital services and retail are stabilizing the company’s earnings and strengthening cash flows.
Strong earnings from digital and retail business
It has been said in the report that by the financial year 2026, about 60 percent of the total operating cash flow of Reliance can come from the digital and retail sectors. The remaining 40 percent could come from oil-to-chemicals and oil-gas business. This means that Reliance’s earnings are now moving away from volatile businesses like hydrocarbons towards more reliable areas. The agency has also estimated that the company’s EBITDA could reach around ₹1.95 lakh crore by FY 2026.
Jio becomes earning engine
According to the S&P report, Jio’s digital services sector will remain a major part of Reliance’s earnings. Jio’s wireless subscribers are expected to grow by 3 to 6 percent in the coming 12 to 24 months. Apart from this, expensive plans and increase in data consumption are expected to improve ARPU (Average Revenue Per User). Digital Services and JioStar are expected to generate approximately ₹ 80,000 crore EBITDA in FY 2026, which will be about 43 percent of the company’s total earnings.
Contribution of retail business
Reliance’s retail business is also strengthening its cash flow. Retail is expected to generate about ₹ 27,000 crore EBITDA in FY 2026, which will contribute about 14 percent of the company’s total earnings. Due to opening of new stores across the country and strong supply-chain network, retail has now become a reliable earning pillar for Reliance.
Renewable and new energy investments in the future
S&P also said that despite heavy investment, Reliance will maintain its strong market position and financial stability will be maintained in the coming 12 to 24 months. Annual capex could be around ₹1.4 lakh crore. In the coming years, the company may increase investment in renewable and new energy sectors, which are not contributing to earnings now, but can become big growth drivers in the next five years.