In its commentary on FY26 earnings of India’s most respected firm, CreditSights mentioned the administration within the earnings name shared that “the Jio IPO was imminent.”
Earlier market rumors reported that the IPO may come as early as Could, with Reliance seeking to shed 2.5-3 per cent stake from its present 67 per cent stake in Jio for near $4 billion (₹37,500 crore).
“We imagine the Mideast battle might delay Jio’s IPO in the direction of the second half of the yr,” CreditSights, a part of the Fitch Group, mentioned. “A Jio IPO will elevate money for debt reimbursement and capex, and enhance Jio’s competitiveness towards rivals Bharti and Vodafone Thought.”
Reliance reported 2025-26 (FY26) income and EBITDA progress of 10 per cent and eight per cent year-on-year, respectively, with retail and telecom persevering with to steer efficiency. Its oils-to-chemicals (O2C) phase recovered from a low base regardless of disruptions linked to West Asia tensions.
“Administration guided in the direction of wholesome FY27 (April 2026 to March 2027 fiscal) retail and telecom earnings progress, with O2C earnings remaining resilient however unstable as strong refining margins are met with larger crude sourcing, freight, and insurance coverage prices,” CreditSights mentioned.
The corporate added that “extended decrease cracker working charges (Center East and Asia) may assist petchem spreads as soon as feedstock volatility eases,” highlighting its built-in operations, diversified sourcing community and excessive non-naphtha feedstock combine.
Capex, Deleveraging in Focus
Capital expenditure is predicted to rise to ₹1.5-1.6 trillion in FY27 from ₹1.3 trillion a yr earlier, largely funded by inside accruals and directed towards petrochemicals growth, renewable vitality, battery manufacturing and knowledge facilities.
The corporate administration within the name mentioned it’s getting into FY27 with a “sturdy stability sheet,” with gross and web leverage bettering to 2.8x and a pair of.0x, respectively. Internet leverage is projected to say no additional to 1.7x-1.8x, supported by earnings progress and potential IPO proceeds.
“The corporate’s reported web leverage possible excludes leases and telecom deferred cost liabilities from debt, and contains different market-linked investments in money,” CreditSights mentioned.
Main new vitality initiatives embrace full commissioning of the 20 GW photo voltaic module and cell manufacturing, scaling up battery manufacturing capacities to 100 gigawatt-hours each year (to fee first section of 40 GWh this yr), and progressive commissioning of 150 GW photo voltaic and inexperienced hydrogen initiatives in Kutch.
Information heart investments have already began with extra particulars to be given over the following few quarters.
“We do not count on Reliance to make outsized investments for its US refinery mission that US President Trump earlier known as a “historic $300 billion deal”. We imagine the $300 bn determine refers back to the complete worth of 20-year purchases of US shale oil and refined merchandise by Reliance for the refinery, with precise capex small at lower than $1 billion (₹9,400 crore),” it mentioned.
Outlook
CreditSights anticipated O2C earnings to profit from elevated transportation gas margins pushed by the Center East battle, significantly in export markets. Nonetheless, petrochemical spreads stay weak because of world oversupply.
Retail and telecom are seen as key progress drivers, supported by resilient demand and regular subscriber additions. The telecom sector may additionally see tariff hikes within the second half of FY27, whereas administration guided for 4-5 per cent natural common income per person (ARPU) progress within the absence of value will increase.
New vitality companies, together with photo voltaic manufacturing and renewable capability additions, are anticipated to start contributing to earnings.
“Our key expectations embrace: O2C EBITDA to profit from elevated transportation gas cracks led by the Mideast conflict. Transportation fuels sometimes kind 60-66 per cent of Reliance’s complete manufacturing. The good points will possible be realised extra from exports (40-45 per cent of manufacturing) that take pleasure in higher value passthroughs, versus home gross sales which can be extra constrained by government-administered pricing,” it mentioned.
Whereas petchem spreads, particularly polyethylene (PE) and polypropylene (PP), stay weak, administration believes continued Mideast cracker shutdowns and decreased Asian cracker working charges may drive an accelerated restoration of spreads.
“Regardless of excessive naphtha costs, we expect the influence on margins is mitigated by Reliance’s diversified feedstock sourcing combine (about 25 per cent naphtha solely, relaxation shaped by less-volatile off-gases and ethane) and built-in operations facilitating uncooked materials diversion in the direction of higher-margin merchandise,” it mentioned.
Provide safety stays in focus, however Reliance is better-positioned given its diversified sourcing community outdoors the Mideast (US, Canada, South America, Russia and so on.).
“Retail and telecom stay the brilliant spots. We count on retail demand to stay resilient, with administration guiding for good progress throughout retailer rely, sq. footage per retailer, and retailer effectivity. We additionally count on telecom demand to stay sturdy, and see prospects of industry-wide tariff hikes probably in F2H27,” CreditSights added.
New vitality companies are anticipated to start contributing to earnings, together with from the photo voltaic module manufacturing unit and renewable capacities at Kutch.
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