RELIANCE - Reliance Industries Ltd Share Price

Management provided a positive outlook during the earnings call for the quarter ended December 31, 2025, highlighting robust performances across several segments. Key points include:

1. Financial Results: Total revenue increased by 10%, and EBITDA rose by 6%. Profit After Tax (PAT) reached Rs.22,290 crores, up 1.6%. For the nine-month period, revenues grew by 9%, EBITDA by 18%, and PAT saw a significant increase of 28%.

2. Consumer Business Growth: Customer additions were strong, with Jio platforms acquiring 9 million new subscribers, totaling 515 million customers. The quick commerce segment saw a substantial escalation with a run rate of 1.6 million orders, positioning it to become the second-largest player in this sector.

3. Retail Performance: Retail revenue stood at Rs.97,600 crores, up 8.1%, with store count approaching 20,000. The impact from the RCPL demerger and festive season timing were noted as influencing factors on margins.

4. O2C Segment: The O2C segment performed well, achieving 15% growth in EBITDA, significantly driven by robust demand for transportation fuels and effective cost management strategies.

5. New Energy Initiatives: Management emphasized progress in establishing a fully integrated solar manufacturing chain, aiming for a 10-gigawatt peak annual solar capacity, scalable to 20-gigawatts. There's strong alignment with national energy goals, including a planned focus on battery storage and electrolyzer development.

6. Market Positioning: The upgrade of S&P rating from BBB+ to A- is expected to enhance liquidity and lower credit spreads, reflecting the company's strong performance and shift towards consumer-centric, less cyclical business models.

Overall, the management expressed confidence in sustaining growth across segments while addressing challenges and opportunities through strategic execution in their diversified business model.

Here are the major Q&A questions and answers from the earnings transcript:

1. Question: "What are the buckets which you think did not do that well in this quarter which led to slightly lower revenue growth?"
   Answer: "Primarily, it's on the fashion side where demand from Q2 spilled over since it was a big festival quarter. This meant a strong Q2 for apparel, impacting Q3 growth, which is in single digits year-on-year. Additionally, our recent RCPL demerger affects like-for-like comparisons."

2. Question: "On the quick commerce side, can you give some sense of what is a quantum of cash burn there?"
   Answer: "On a contribution margin level, we are positive. While we don't disclose exact cash burn, our scaling efficiency is improving, leading us to positive margins as we grow."

3. Question: "Can you give some colour on where major part of Rs.34,000 Crores is going and how should one think about capex into next year?"
   Answer: "Approximately Rs.9,000 Crores is allocated to O2C-related expansion, Rs.8,000 Crores for new energy, Rs.7,500 Crores for Jio, and Rs.4,000 Crores for retail, with the balance for real estate."

4. Question: "Do you think in the way current prices are you will be competitive in new energy?"
   Answer: "Yes, current pricing dynamics are supportive, validating our integrated ecosystem strategy. Our reliance on round-the-clock green energy optimizes our overall cost structure."

5. Question: "Can you quantify how much power would you need for your own polysilicon plant here?"
   Answer: "I can't quantify that right now, but in polysilicon production, power costs are crucial, and we aim to minimize these through efficient sourcing."

6. Question: "Will the capacity for solar glass and polysilicon be similar to the module capacity?"
   Answer: "Yes, our upstream production capacity will exceed 10 gigawatts to ensure we achieve economic scales and support further expansions."

7. Question: "Are you planning to sell outside the initial capacity?"
   Answer: "By then, we would have expanded our capacity significantly and will seek to supply both internally and externally."

8. Question: "Regarding energy generation capacity, what end goal are you setting?"
   Answer: "We aim for 300 billion units of power generation annually, focusing on both captive use and export opportunities like green fuels."

9. Question: "How do you prioritize your own services against those offered by partners like Google?"
   Answer: "Jio has the flexibility to choose and integrate valuable services from any partner while maintaining revenue-generating opportunities, minimizing costs incurred."

10. Question: "What is the current count of dark stores for quick commerce?"

Answer: "We currently operate about 800 dark stores, which represents less than 30% of our total store count. Our established grocery business supports solid order margins."

1. Question: "As quick commerce scales, will it remain a margin headwind?"

Answer: "While there are additional delivery costs, leveraging our extensive store network mitigates this, allowing us to maintain overall margin positivity."

1. Question: "Would the impact of the RCPL demerger affect next quarter's retail business?"

Answer: "Yes, a month of revenue from RCPL is removed. However, we expect strong underlying business growth, evidenced by a double-digit revenue increase overall."

These answers provide insights into the company's operations and strategies for future growth while addressing concerns regarding investments and market competition.