Reliance Industries: Navigating Retail and Refining Challenges

Reliance Industries faces two major challenges: a rebound in refining margins and sluggish retail growth. With these dynamics affecting performance, Reliance's consolidated EBITDA is supported by telecom and retail sectors, despite high capital expenditure. Recent changes in Chinese export policies could influence refining outcomes.

Reliance Industries is tackling two significant challenges impacting its performance. The first challenge, a rebound in refining margins, signals a shift in market dynamics, while sluggish retail growth poses a more unpredictable hurdle, according to a JP Morgan report.

Reliance's stock has fallen 22% from its July peak as the NIFTY index dipped just 3.3%, erasing earlier gains. Despite this, its relative market valuations remain attractive amid generally high market pricing.

The company, led by Mukesh Ambani, leverages its oil-to-chemical unit, telecom arm Jio, and retail sector, now constituting 50% of its 2023-24 EBITDA. A potential listing of Jio/retail could be delayed due to market conditions.

(With inputs from agencies.)