Shares of Reliance Industries (RIL) surged as much as 1.9% to ₹1,198 apiece on the NSE in the opening deals on Thursday, March 6, after Jefferies, the global investment bank and financial services company, released its report on the oil-to-telecom conglomerate.
Jefferies said that RIL’s underperformance compared to the benchmark NIFTY50 index is due to a slowdown in retail and subdued earnings in the O2C business.
In the past 12 months, RIL’s stock price has fallen 21% while the NSE’s NIFTY50 index has slipped less than 1%. Moreover, shares of the company (as of Wednesday’s close) are trading 37% lower from its all-time high level of ₹1,608.80, touched on July 8, 2024.
According to a report by The Economic Times that was published in August 2024, as many as 12 listed lifestyle, grocery retailers, and quick-service restaurants (QSRs) cut their workforce by around 26,000, reversing the hiring surge of the previous two financial years as they slowed down store expansion in response to declining demand.
According to their annual reports, this reduction was primarily driven by five major retailers—Reliance Industries’ retail division, Titan, Raymond, Page, and Spencers—which collectively saw their workforce shrink by 17% or 52,000 employees. This figure includes both permanent and contractual staff and accounts for attrition in the retail sector, the second largest employer after agriculture. The total workforce for these retailers dropped to 429,000 in FY24 from 455,000 the previous year.
Jefferies added that pessimism around RIL seems extreme, with the current market capitalisation implying a $48 billion enterprise value for retail vs. $106 billion in the last funding round, as per news reports.
Jefferies further said that the combination of same-store sales growth (SSG) and area addition should restore 15% growth in retail in FY26.
It further said that a tariff hike, listing of Jio, and improvement in O2C profitability are other potential triggers for the stock.
RIL Q3 FY25 Results
RIL reported a 7.4% rise in its December quarter (Q3 FY25) net profit as the retail business rebounded, telecom earnings surged on higher tariffs, and the mainstay oil and petrochemicals business delivered consistent performance.
Its consolidated net profit came in at ₹18,540 crore, or ₹13.70 per share, in October-December—the third quarter of the April 2024 to March 2025 fiscal (FY25)—compared to ₹17,265 crore, or ₹12.76 a share, logged in the same period a year back, according to a company statement.
Profit was also up sequentially from ₹16,563 crore in the July-September quarter.
The profit before tax (EBITDA) rose 7.8% to ₹48,003 crore. This was despite an almost 7% rise in finance cost due to higher debt (₹3.5 lakh crore as of December 31, 2024, compared to ₹3.36 lakh crore in September and ₹3.11 lakh crore in December 2023).
The oil-to-chemical business, which houses the company’s twin refineries at Jamnagar in Gujarat and petrochemical plants, saw EBITDA rise 2.4% to ₹14,402 crore.
The refineries processed more crude, and petchem margins improved.
In the fuel retail business, Jio-bp—its joint venture with BP of the UK—posted “the highest ever quarterly sales across both petrol and diesel,” the statement said.
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