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India.com
11-06-2025
- Business
- India.com
Mukesh Ambani's Reliance Industries overtaken as profit source by…, every second rupee he earns comes from…
The transition can be seen in Mukesh Ambani led company's performance. He was always known as an oil baron due to its major income from core energy business Reliance Industries. But this picture seems to be changing now as the every second rupee of Reliance Industries Ltd's (RIL) operating cash profit now comes from its consumer-facing business that is Reliance Retail and Reliance Jio. 'Reliance Retail + Telecom now account for 54% of total FY25 consolidated EBITDA,' wrote Sanjay Mookim, analyst at JPMorgan in a recent report. 'Prior to venturing into retail/telecom, RIL's earnings growth was determined by either capex (new refining/chemical capacities), or margin cycles. Capex cycles then tended to impact stock performance.' Reliance Retail and Jio are now contributing over half of its operating cash profit. Analysts predict substantial EBITDA growth driven by these sectors, leading to positive free cash flow despite major investments. In FY17, 96% of Reliance's EBITDA used to come from its core energy operations. Now in FY25, the consumer vertical's business has increased in overall EBITDA. According to JPMorgan, RIL's adjusted consolidated EBITDA is at Rs 165,444 crore in FY25, rising to Rs 216,103 crore by FY28 and it will be driven by Retail and Jio. 'These will account for almost all of the net EBITDA growth over the next three years,' Mookim said. JPMorgan also expects RIL to turn free cash flow positive, even with continued investments in new energy, retail, and petrochemicals. The brokerage sees RIL's net debt to EBITDA remaining below 1x shows a healthy balance sheet and consistent cash flow generation. JPMorgan has an Overweight rating on the stock with a target price of Rs 1,568 by March 2026. According to Jefferies, RIL's consumer business is built on massive investment at Rs 6 lakh crore in free cash flow which was deployed into consumer businesses that created Rs 18 lakh crore equity value.
Time of India
11-06-2025
- Business
- Time of India
Mukesh Ambani's consumer empire overtakes decades-old energy business of RIL
Marking the transition of Asia's richest billionaire Mukesh Ambani from being an oil baron to a consumer titan, every second rupee of Reliance Industries Ltd's (RIL) operating cash profit now comes from its twin consumer-facing ventures of Reliance Retail and Reliance Jio . 'Reliance Retail + Telecom now account for ~54% of total FY25 consolidated EBITDA,' wrote Sanjay Mookim, analyst at JPMorgan in a recent report. 'Prior to venturing into retail/telecom, RIL's earnings growth was determined by either capex (new refining/chemical capacities), or margin cycles. Capex cycles then tended to impact stock performance.' Back in FY17, a staggering 96% of Reliance's EBITDA came from its core energy operations. Fast forward to FY25, and the consumer verticals have taken center stage. According to JPMorgan, RIL's adjusted consolidated EBITDA is pegged at Rs 165,444 crore in FY25, rising to Rs 216,103 crore by FY28—driven almost entirely by Retail and Jio. 'These will account for almost all of the net EBITDA growth over the next three years,' Mookim said. While the group operated at materially negative free cash flow over the past three years due to heavy telecom spending, that cycle is winding down. JPMorgan expects RIL to turn free cash flow positive, even with continued investments in new energy, retail, and petrochemicals. With an annual EBITDA run-rate of $20 billion, the brokerage sees RIL's net debt to EBITDA remaining below 1x, indicating a healthy balance sheet and consistent cash flow generation. JPMorgan has an Overweight rating on the stock with a target price of Rs 1,568 by March 2026. RIL's consumer empire has been built on massive investment: Rs 6 lakh crore in free cash flow has been deployed into consumer businesses, creating Rs 18 lakh crore in equity value, according to Jefferies. Still, while consumer EBITDA has surged 30% over the past two years, post-minority contribution hasn't translated into proportional growth in PAT, a key gap analysts are monitoring. Also read | Reliance Industries share price prediction: Brokerages see up to 31% upside after Q4 results Telecom: The New Growth Engine The telecom juggernaut Jio is leading the earnings charge. Jefferies forecasts 21% EBITDA CAGR for Jio between FY25–27, supported by an improving pricing environment and growth in the home broadband business. 'We believe telecom is the best way to play consumption in India due to which valuations also have scope to re-rate,' Jefferies said, adding that moderating capex intensity will drive a 10x jump in free cash flow over FY25–27. Bernstein sees Jio's EBITDA margin expanding from 53.4% in FY25 to 58.8% in FY27, led by greater 4G/5G monetisation and ARPU upgrades. 'Telecom will remain the bright spot as ARPU hike reflects in earnings with capex continuing downward trend. We expect ~13% CAGR revenue growth for Jio over the next 2 years. We also expect acceleration in Jio AirFiber rollout, driving faster broadband additions and supporting overall growth momentum. Market share gains should continue as Jio reaches ~500 Mn subs & ~48% revenue share by FY27,' Bernstein's Rahul Malhotra said. Retail: Quiet Yet Powerful Retail is also scaling up fast. EBITDA CAGR for Reliance Retail is expected to clock 15–20% over FY25–27, according to Jefferies and Bernstein. Margins are improving too, seen rising from 7.6% in FY25 to 8.0% by FY27, driven by stronger growth in private labels and operational efficiencies. Bernstein estimates the retail EBITDA mix will reach 15% by FY27, while digital businesses (primarily Jio) will contribute 40–45% of total EBITDA over the next five years. 'We expect Retail to rebound post the store rationalization & get back to mid-single digit growth in FY25 and double digit growth in FY27. Retail capex should normalize with focus on improving revenue/sqft as older stores mature. We see the following reasons for retail to grow: (1) New tax laws boosting consumer spending with higher disposable income in the hands of individuals; (2) Weddings and festive seasons providing a boost to growth; (3) Fast fashion pace growing rapidly,' Bernstein said. With Mukesh Ambani 's consumer bet reshaping the future of India's most valuable company, analysts see chances of RIL shares getting re-rated. Also read | Reliance Industries shares at inflection point. 6 reasons why FY26 could be the year of big re-rating
Time of India
11-06-2025
- Business
- Time of India
Mukesh Ambani's consumer empire overtakes decades-old energy business of RIL
Marking the transition of Asia's richest billionaire Mukesh Ambani from being an oil baron to a consumer titan, every second rupee of Reliance Industries Ltd's (RIL) operating cash profit now comes from its twin consumer-facing ventures of Reliance Retail and Reliance Jio . 'Reliance Retail + Telecom now account for ~54% of total FY25 consolidated EBITDA,' wrote Sanjay Mookim , analyst at JPMorgan in a recent report. 'Prior to venturing into retail/telecom, RIL's earnings growth was determined by either capex (new refining/chemical capacities), or margin cycles. Capex cycles then tended to impact stock performance.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo Back in FY17, a staggering 96% of Reliance's EBITDA came from its core energy operations. Fast forward to FY25, and the consumer verticals have taken center stage. According to JPMorgan, RIL's adjusted consolidated EBITDA is pegged at Rs 165,444 crore in FY25, rising to Rs 216,103 crore by FY28—driven almost entirely by Retail and Jio. 'These will account for almost all of the net EBITDA growth over the next three years,' Mookim said. While the group operated at materially negative free cash flow over the past three years due to heavy telecom spending, that cycle is winding down. JPMorgan expects RIL to turn free cash flow positive, even with continued investments in new energy, retail, and petrochemicals. With an annual EBITDA run-rate of $20 billion, the brokerage sees RIL's net debt to EBITDA remaining below 1x, indicating a healthy balance sheet and consistent cash flow generation. JPMorgan has an Overweight rating on the stock with a target price of Rs 1,568 by March 2026. Live Events RIL's consumer empire has been built on massive investment: Rs 6 lakh crore in free cash flow has been deployed into consumer businesses, creating Rs 18 lakh crore in equity value, according to Jefferies. Still, while consumer EBITDA has surged 30% over the past two years, post-minority contribution hasn't translated into proportional growth in PAT, a key gap analysts are monitoring. Also read | Reliance Industries share price prediction: Brokerages see up to 31% upside after Q4 results Telecom: The New Growth Engine The telecom juggernaut Jio is leading the earnings charge. Jefferies forecasts 21% EBITDA CAGR for Jio between FY25–27, supported by an improving pricing environment and growth in the home broadband business. 'We believe telecom is the best way to play consumption in India due to which valuations also have scope to re-rate,' Jefferies said, adding that moderating capex intensity will drive a 10x jump in free cash flow over FY25–27. Bernstein sees Jio's EBITDA margin expanding from 53.4% in FY25 to 58.8% in FY27, led by greater 4G/5G monetisation and ARPU upgrades. 'Telecom will remain the bright spot as ARPU hike reflects in earnings with capex continuing downward trend. We expect ~13% CAGR revenue growth for Jio over the next 2 years. We also expect acceleration in Jio AirFiber rollout, driving faster broadband additions and supporting overall growth momentum. Market share gains should continue as Jio reaches ~500 Mn subs & ~48% revenue share by FY27,' Bernstein's Rahul Malhotra said. Retail: Quiet Yet Powerful Retail is also scaling up fast. EBITDA CAGR for Reliance Retail is expected to clock 15–20% over FY25–27, according to Jefferies and Bernstein. Margins are improving too, seen rising from 7.6% in FY25 to 8.0% by FY27, driven by stronger growth in private labels and operational efficiencies. Bernstein estimates the retail EBITDA mix will reach 15% by FY27, while digital businesses (primarily Jio) will contribute 40–45% of total EBITDA over the next five years. 'We expect Retail to rebound post the store rationalization & get back to mid-single digit growth in FY25 and double digit growth in FY27. Retail capex should normalize with focus on improving revenue/sqft as older stores mature. We see the following reasons for retail to grow: (1) New tax laws boosting consumer spending with higher disposable income in the hands of individuals; (2) Weddings and festive seasons providing a boost to growth; (3) Fast fashion pace growing rapidly,' Bernstein said. With Mukesh Ambani's consumer bet reshaping the future of India's most valuable company, analysts see chances of RIL shares getting re-rated. Also read | Reliance Industries shares at inflection point. 6 reasons why FY26 could be the year of big re-rating ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Economic Times
11-06-2025
- Business
- Economic Times
Mukesh Ambani's consumer empire overtakes decades-old energy business of RIL
Live Events Telecom: The New Growth Engine Retail: Quiet Yet Powerful (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Marking the transition of Asia's richest billionaire Mukesh Ambani from being an oil baron to a consumer titan, every second rupee of Reliance Industries Ltd's (RIL) operating cash profit now comes from its twin consumer-facing ventures of Reliance Retail and Reliance Jio 'Reliance Retail + Telecom now account for ~54% of total FY25 consolidated EBITDA,' wrote Sanjay Mookim , analyst at JPMorgan in a recent report. 'Prior to venturing into retail/telecom, RIL's earnings growth was determined by either capex (new refining/chemical capacities), or margin cycles. Capex cycles then tended to impact stock performance.'Back in FY17, a staggering 96% of Reliance's EBITDA came from its core energy operations. Fast forward to FY25, and the consumer verticals have taken center stage. According to JPMorgan, RIL's adjusted consolidated EBITDA is pegged at Rs 165,444 crore in FY25, rising to Rs 216,103 crore by FY28—driven almost entirely by Retail and Jio.'These will account for almost all of the net EBITDA growth over the next three years,' Mookim said. While the group operated at materially negative free cash flow over the past three years due to heavy telecom spending, that cycle is winding down. JPMorgan expects RIL to turn free cash flow positive, even with continued investments in new energy, retail, and an annual EBITDA run-rate of $20 billion, the brokerage sees RIL's net debt to EBITDA remaining below 1x, indicating a healthy balance sheet and consistent cash flow generation. JPMorgan has an Overweight rating on the stock with a target price of Rs 1,568 by March consumer empire has been built on massive investment: Rs 6 lakh crore in free cash flow has been deployed into consumer businesses, creating Rs 18 lakh crore in equity value, according to while consumer EBITDA has surged 30% over the past two years, post-minority contribution hasn't translated into proportional growth in PAT, a key gap analysts are telecom juggernaut Jio is leading the earnings charge. Jefferies forecasts 21% EBITDA CAGR for Jio between FY25–27, supported by an improving pricing environment and growth in the home broadband business.'We believe telecom is the best way to play consumption in India due to which valuations also have scope to re-rate,' Jefferies said, adding that moderating capex intensity will drive a 10x jump in free cash flow over FY25– sees Jio's EBITDA margin expanding from 53.4% in FY25 to 58.8% in FY27, led by greater 4G/5G monetisation and ARPU upgrades.'Telecom will remain the bright spot as ARPU hike reflects in earnings with capex continuing downward trend. We expect ~13% CAGR revenue growth for Jio over the next 2 years. We also expect acceleration in Jio AirFiber rollout, driving faster broadband additions and supporting overall growth momentum. Market share gains should continue as Jio reaches ~500 Mn subs & ~48% revenue share by FY27,' Bernstein's Rahul Malhotra is also scaling up fast. EBITDA CAGR for Reliance Retail is expected to clock 15–20% over FY25–27, according to Jefferies and Bernstein. Margins are improving too, seen rising from 7.6% in FY25 to 8.0% by FY27, driven by stronger growth in private labels and operational estimates the retail EBITDA mix will reach 15% by FY27, while digital businesses (primarily Jio) will contribute 40–45% of total EBITDA over the next five years.'We expect Retail to rebound post the store rationalization & get back to mid-single digit growth in FY25 and double digit growth in FY27. Retail capex should normalize with focus on improving revenue/sqft as older stores mature. We see the following reasons for retail to grow: (1) New tax laws boosting consumer spending with higher disposable income in the hands of individuals; (2) Weddings and festive seasons providing a boost to growth; (3) Fast fashion pace growing rapidly,' Bernstein Mukesh Ambani's consumer bet reshaping the future of India's most valuable company, analysts see chances of RIL shares getting re-rated.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
05-06-2025
- Business
- Time of India
RIL earnings in next 2 years should be better than last 2: JPMorgan
With shares of Reliance Industries (RIL) having underperformed over the past year with just a 2% return, global brokerage firm Jefferies said on Thursday that the blue-chip stock has felt the pressure of large earnings cuts, but growth in the consumer business could drive a rally going Sanjay Mookim said RIL's earnings over the next two years should be better than in the previous two, as weaker commodity EBIT is unlikely to recur given the already low margins.'Consumer business growth should translate better to the bottom line, helping relative performance,' Mookim said in a report, assigning an Overweight rating with a target price of ₹1,568. The oil-to-chemicals (O2C) segment now accounts for only a third of RIL's consolidated EBITDA. JP Morgan noted that the drag from any margin weakness should be lower, and base effects are favorable for retail and telecom in H1/Q1FY26. This, it said, should support near-term earnings growth. 'In the short term, RIL's relative performance to the Nifty has tended to respond to Nifty relative EPS revisions. The unanticipated weakness in refining and petchem margins drove sharp earnings cuts in FY25—hurting stock performance, in our view,' the report stated. Reliance Retail and Jio now account for about 54% of RIL's total consolidated EBITDA in FY25. 'On our estimates, these two segments will account for almost all of the net EBITDA growth over the next three years. RIL has operated with materially negative free cash flow over the last three years, driven by telecom spending. As that fades, and with an EBITDA run rate of approximately $20 billion a year, we expect Reliance to generate positive free cash flow—despite elevated capex plans at the New Energy complex, in retail, and in petchem capacity expansions,' JP Morgan added. Recent company guidance of maintaining net debt to EBITDA below 1x also supports the outlook for positive free cash flow, the brokerage said. RIL shares rose nearly 2% following the brokerage report, touching an intraday high of ₹1,454.50 on the BSE.
