Reliance Industries: A Three-Year Performance Deep Dive

Reliance Industries Limited (RIL) remains India’s largest conglomerate, spanning oil-to-chemicals (O2C), telecom, retail, and new energy. Over the past three years, its financial performance, operational pivots, and stock returns have created a mixed story: one of resilience, diversification, and underperformance relative to the index.

Financial Indicators (Past 3 Years)

1. Revenue Growth – Reliance has delivered a three-year revenue CAGR of ~11.5%, powered by strong contributions from its O2C and consumer businesses .

2. Scale in FY25 – The group reported gross revenue of ₹10.71 lakh crore, EBITDA of ₹1.83 lakh crore, and net profit of ₹81,309 crore, supported by capex investments of over ₹1.31 lakh crore .

3. O2C Segment Dynamics – FY25 O2C revenues rose 15.4% year-on-year, but EBITDA slipped 10%, reflecting weak refining cracks and chemical spreads .

4. Return Ratios – Three-year ROE averaged ~9%, while profit CAGR stood at ~5% .

5. Dividend Payout – Reliance maintained a modest payout ratio of ~9.8% over three years, preferring reinvestment into growth .

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Non-Financial Indicators

1. Jio Platforms – In FY25, Jio turned free cash flow positive. Platform revenues grew nearly five-fold year-on-year, underscoring the monetisation potential of 5G and digital services .

2. Retail Performance – Reliance Retail continued to expand aggressively, with Q4 FY25 profit rising 29% YoY, driven by store productivity and consumer demand .

3. Energy Macro Backdrop – Management flagged crude oil price volatility and margin swings as key risks for O2C earnings .

4. New Energy Roadmap – Reliance projects its clean energy businesses (solar modules, storage, hydrogen, fuel cells) could achieve profitability comparable to O2C within 5–7 years .

5. Shareholding Structure – As of June 2025, promoters held 49.11%, reflecting stable ownership .

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Stock Performance Snapshot

Despite strong fundamentals, Reliance’s stock has lagged the benchmark. Over the last three years, RIL’s total return was ~8%, compared to the Nifty 50’s ~42% . This underperformance highlights investor concerns over capex intensity, margin pressure in O2C, and slower-than-expected monetisation of new businesses.

SWOT Analysis

Strengths

• Diversified business model across O2C, telecom, and retail.

• Scale and access to capital enabling sustained investment.

• Jio’s shift to positive free cash flow and platform-led growth.

Weaknesses

• O2C earnings remain vulnerable to global margin swings (FY25 EBITDA fell 10%).

• ROE of ~9% is modest compared to global energy and tech peers.

Opportunities

• Monetisation of 5G, enterprise solutions, and broadband services.

• Expansion of Reliance Retail’s footprint and digital integration.

• Ambitious new energy platform, potentially matching O2C profitability in 5–7 years.

Threats

• Crude volatility and regulatory risks in telecom and retail.

• High depreciation and interest from continued capital investments.

The Road Ahead

Reliance stands at an inflection point. Its consumer verticals—Jio and Retail—are scaling profitably, while new energy investments could reshape the company’s future earnings profile. However, cyclicality in O2C, regulatory risks, and capital intensity remain headwinds.

For investors, the key question is whether Reliance’s next three years will unlock the promised growth in digital and green energy—or continue to be weighed down by traditional energy cycles.