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Informist, Friday, Aug. 28, 2026

--Fitch upgrades RIL local-currency issuer rtg to 'A- '; outlook stable 

--Fitch affirms RIL foreign-currency issuer rtg at 'BBB' 

--Fitch affirms RIL foreign-currency issuer rtg at 'BBB'; outlook stable 

MUMBAI – Fitch Ratings Friday upgraded the long-term local currency issuer default rating on oil-to-retail conglomerate Reliance Industries Ltd. to "A-" from "BBB", with a "stable" outlook, on expectations that the company's positive free cash flow generation will be sustained by higher earnings before interest, tax, depreciation, and amortisation and lower capital expenditure intensity. Further, Fitch affirmed the company's long-term foreign currency rating at "BBB" with a "stable" outlook.

"The rise in EBITDA contribution from its relatively stable consumer-facing businesses further strengthens cash flow stability," Fitch Ratings said in a release. RIL's stronger operating profile, more resilient cash flow generation, and improved financial flexibility support greater debt capacity than the rating agency previously expected. "We expect EBITDA net leverage to improve gradually over time, consistent with the stronger credit profile," Fitch said.

RIL is expected to derive around 60% of its EBITDA from consumer-facing telecommunication and retail businesses. The remainder, Fitch said, could come from oil-to-chemicals and the upstream oil and gas segments. RIL diversified its operations over the past decade by pouring in ample amounts towards capital expenditure.

The Mukesh Ambani-led firm has started generating positive free cash flow only since the financial year 2024-25 (Apr-Mar), and is expected to continue doing so for the next 3-4 years, Fitch said. "The sustained positive FCF (free cash flow) will be driven by rising EBITDA and a fall in capex (capital expenditure) intensity to around 11%, mainly arising from reduced telecom capex as core 5G (fifth generation mobile telephony) investments peak," Fitch said. Heavy investments towards its telecom business helped Reliance Jio, under Jio Platforms Ltd. which will soon be listed on Indian bourses, position itself among India's top telecom companies.

RIL has also been investing heavily in the green energy business, having had a presence in the petroleum business since 1999, when it commissioned  its first refinery in Jamnagar, Gujarat. RIL's investments in new energy will increase gradually going forward, Fitch said.

The pace of capital expenditure in RIL's new energy and materials segment is expected to rise in the coming years as the company commissions and scales up its gigafactories for photovoltaic panels, fuel cell systems, green hydrogen, energy storage, and power electronics.

RIL's EBITDA is expected to rise by around 20% to INR 2 trillion by FY28, Fitch said. The company currently has around 40% subscriber share and 50% broadband share in India's wireless telephony market. "We forecast EBITDA from digital services, largely telecom, to increase by 11% in FY27. This would be driven by growth in subscribers, broadband, data usage, average revenue per user (ARPU) and customers moving to higher-priced plans," Fitch said. 

Additionally, RIL holds leadership positions in multiple retail segments. "We forecast retail segment EBITDA to rise by around 8% in FY27, aided by RIL's continued expansion across physical and digital channels, and better operating leverage from investments in technology and infrastructure," Fitch said. 

For the June quarter, RIL had reported consolidated net profit of INR 209.5 billion on revenues of INR 3.1 trillion. Friday, its shares ended at INR 1,287 on the National Stock Exchange, up 0.4% from Thursday.  End

Reported by Anand JC

Edited by Rajeev Pai

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