India’s largest company, Reliance Industries Limited (RIL), is navigating a challenging period marked by slowing retail growth and geopolitical pressures affecting its oil and new energy businesses. While the conglomerate’s oil refining and telecom verticals continue to perform steadily, the retail segment slowdown is emerging as a major concern for investors and analysts.
Retail Growth Slows, Analysts Lower Stock Targets
Reliance Retail, the group’s third-largest vertical, reported revenue growth of just 8.1% year-on-year for the December quarter, with EBITDA rising only 2%.
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Isha Ambani, head of Reliance Retail, expressed confidence in achieving 20%+ CAGR in retail revenues over the next three years.
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Despite this, global brokerages have cut target prices for RIL shares:
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Citi reduced the target to ₹1,815 per share from ₹1,860
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UBS lowered it to ₹1,790 from ₹1,820
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Macquarie Capital also removed Reliance from its Asia Marquee list, noting that the slowing retail growth is a key factor in the company’s valuation.
Uneven Demand Across Segments
The Indian government’s GST rate cuts in September 2025 aimed to boost consumption. While sales of gold and automobiles rose, fashion and consumer staples experienced weaker growth. Analysts at Bernstein expect a gradual recovery, not a sharp rebound in consumer demand.
Reliance Retail peers, including Avenue Supermarkets and Tata Group’s Trent, also reported slower December quarter growth, highlighting an industry-wide trend rather than a company-specific issue.
Oil and New Energy Operations Weather Geopolitical Pressures
Reliance Industries has reduced imports of cheap Russian crude following U.S. sanctions on Rosneft and Lukoil. Russian crude previously accounted for 40–45% of the company’s crude mix. Despite this, EBITDA for the oil-to-chemicals segment rose 15% year-on-year, supported by strong refining margins offsetting lower Russian crude supply and higher freight costs.
Geopolitical concerns have also affected the company’s new energy ventures. Reports suggested delays in the 40-gigawatt battery storage project due to technology transfer restrictions from China. RIL clarified that the project is progressing as planned, with commissioning expected in the next few quarters.
Telecom Business Remains Robust
The telecom division, which is preparing for a potential listing this year, continued its steady performance:
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Revenue grew 12.7% year-on-year
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EBITDA rose 16.4%
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Added 8.9 million new customers, bringing the total subscriber base to 515 million
The telecom business remains largely unaffected by retail slowdown or geopolitical tensions, providing a stable revenue source for the conglomerate.
Looking Ahead
Reliance Industries faces a dual challenge: managing domestic retail growth pressures while navigating geopolitical risks in energy sourcing and new technology acquisition.
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Retail remains a key growth driver, with analysts closely monitoring consumer trends and quarterly performance.
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Oil and telecom segments continue to provide stability, balancing the overall business risk.
Investors are watching closely as RIL implements strategies to revitalize retail performance, expand new energy capacity, and maintain leadership across diversified sectors.
