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RIL’s consol. Q1FY25 EBITDA came in line at Rs388bn, as O2C and Jio were largely as expected; however, Retail saw a 6% miss on slower top-line growth (fashion & lifestyle affected), partly offset by beat in Upstream and Others. Consol. PAT at Rs151bn was a slight miss on lower Other Income. Net debt fell 3% QoQ to Rs1.12trn, whereas capex was Rs288bn. Mgmt. said Jio tariff hikes would add to earnings from Q2, while remaining constructive on O2C. We trim FY25/26E EBITDA by 3%/2%, lowering Retail & O2C earnings, and based on Q1 print. The whole Retail sector has seen weakness in discretionary categories. We maintain ADD with rolled-over Sep-25E TP of Rs3,335/sh (4% up), and raise Jio multiple from 11x to 12x EV/EBITDA. Any positive developments regarding vertical monetization and new energy are key triggers.

Key Result Highlights: O2C saw weakness QoQ due to sharp decline in refining spreads, partly offset by arbitrage crude and cheaper ethane. O2C feedstock/sales stood at 19.8mt/17.7mmt, flat/up 4% QoQ, whereas EBITDA/mt fell 22% to USD79. Upstream EBITDA fell 7% QoQ to Rs52.1bn as opex rose 12% (lower than expected), whereas KG Basin gas volumes were slightly lower at 28.7mmscmd amid weaker prices. Jio clocked in line subs addition of 7.9mn, though ARPU was lower at Rs181.7 (flat QoQ). Jio’s EBITDA rose 2.1% QoQ to Rs149.4bn. Network opex was up 1% QoQ to Rs79.2bn. Retail EBITDA fell 3% QoQ to Rs56.7bn, up 10% YoY with revenue growth of 8% YoY. Net store addition was 82, with retail area rising 3% QoQ to 81.3mn sqft. Growth was steady in Grocery, Electronics, and Jewellery, but Fashion/Lifestyle saw moderation due to overall macro weakness. RIL’s Other Income rose 4% YoY to Rs39.8bn (a 12% miss).

Management KTAs: Mgmt. is structurally constructive on O2C despite volatility, as middle distillate spreads could be supported by steady demand, whereas petchem deltas could be range-bound. Current KG Basin gas output is ~30mmscmd and additional 0.5mmscmd CBM output can be expected from new wells; LNG price outlook is largely steady on lack of new near-term capacity additions and geo-political risks. Jio would see impact of tariff hikes in ensuing quarters, with 5G accounting for 31% of its wireless traffic, amid JioFiber scale-up and spectrum acquisition. Retail focus is on tech platform, with supply chain and distribution capabilities to sustain growth momentum in near to medium-term. Balance sheet remains stable with strong OCF and capex moderation YoY.

Valuation: We value RIL on an SOTP basis, with core segments using Sep-26E EV/EBITDA and Upstream/New Energy/Other segments using DCF+premium/EV-IC/EVsales methodologies. We retain our EV/EBITDA for all segments except Jio (raised to 12x from 11x, reflecting better earnings visibility going ahead, after the tariff hike). Key risks: Adverse commodity/currency, B2C competition, delay in monetization of ventures, and policy & new business risks.

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