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We believe the recent correction in RIL’s share price is overdone (4% this week and 8% in the last 1 month after rise in Middle East tensions) as it won’t be negatively impacted by the recent spike in crude and LNG prices. Instead, RIL could see near-term benefits due to: a) jump in diesel crack on account of supply disruption risk; and b) likely rise in petchem margin (as petchem product prices are likely to rise along with crude price while its feedstock cost is unlikely to rise much as it has limited dependency on crude-linked naphtha). The correction in RIL seems largely due to FII-related selling (FII holding at 21.1% at end-Dec’25 versus peak of 28.3% at end-Mar’21). At CMP, RIL is trading near our bear-case valuation of ~INR 1,275/share - exhibit 3. We reiterate BUY (unchanged TP of INR 1,730) on comfortable valuations after the recent correction, as share price adequately factors concern around near-term weakness in retail business EBITDA growth on account of ramp-up in the quick commerce business. However, it’s not discounting 15-16% EBITDA-compounding story in Digital business over the next 2-3 years driven by 10-11% ARPU CAGR; hence we expect 14-16% EPS CAGR for RIL over the next 3-5 years. Key triggers are Jio’s IPO in the next few months (assuming SEBI norms for large IPOs are notified in the next few weeks) and likely telecom tariff hike post that. At CMP, the stock is trading at FY28E P/E of 16.8x (3-year average 23.9x) and FY28E EV/EBITDA of 8.2x (3-year average 11.9x).

* Spike in crude/LNG price doesn’t hit RIL’s O2C business earnings; instead RIL to see nearterm benefit due to jump in diesel crack and likely rise in petchem margin: We believe the recent correction in RIL’s share price is overdone (4% this week and 8% in last 1 month after escalation in Middle East tensions) as it doesn’t get negatively impacted due to the recent spike in crude and LNG prices. Instead, RIL benefits due to jump in diesel cracks to USD 35-42/bbl in the last 2 days (~USD20/bbl earlier) as the diesel yield for RIL’s refinery is a high 40-50%; assuming diesel crack sustains at ~USD30/bbl, RIL’s GRM could rise by USD 4-5/bbl. Every USD 1/bbl rise in RIL’s GRM on an annualised basis results in an increase in its annual EBITDA by INR 45bn or 2.2% and increase in valuation by INR 29/share of 1.7%. However, we agree this abnormally high diesel crack is not sustainable; also, there could be a risk of the government taking it away via windfall tax (similar to action taken post Russia-Ukraine crisis when the government capped diesel/petrol crack at ~USD20/bbl and took margin beyond that via windfall tax). Further, RIL also benefits due to likely rise in its petchem margin as petchem product prices are likely to rise along with crude price, while its petchem feedstock cost is unlikely to rise much as it has limited dependency on crude-linked naphtha. RIL’s petchem feedstock breakdown is approximately: i) 25% ethane; ii) 50% off-gases and iii) and only 25% crude-linked naphtha

* Correction in RIL overdone; currently trading near our bear-case valuation: We believe the correction in RIL is largely due to FII-related selling given RIL is a large liquid holding for FIIs (FII holding of 21.1% at end-Dec’25 versus peak of 28.3% at end-Mar’21). At CMP, RIL is trading near our bear-case valuation of ~INR 1,275/share (exhibit 3) which is based on: a) 20x FY28E EV/EBITDA multiple for the retail business (25x in the base case) and 15% cut in FY28E retail EBITDA estimate to account for near-term weakness in retail business EBITDA growth on account of ramp-up in the quick commerce business; b) 11x FY28E EV/EBITDA multiple for the telecom business (12.6x in the base case) – at CMP, Bharti India business is trading at 9.5-10x FY28E EV/EBITDA; c) New Energy business at 1x of INR750bn investment (2x in base case); d) 6.5x FY28E EV/EBITDA for O2C business (7.5x in the base case) and 10% lower EBITDA factoring in risk of some impact on refinery throughput due to some shortage of crude availability;

* Reiterate BUY on comfortable valuations, and as we expect strong 14-16% EPS CAGR over the next 3-5 years particularly driven by both consumer businesses: We reiterate BUY (unchanged TP of INR 1,730) on comfortable valuations after the recent correction, as share price adequately factors concern around near-term weakness in retail business EBITDA growth on account of ramp-up in the quick commerce business. However, it’s not discounting 15-16% EBITDA-compounding story in Digital business over the next 2-3 years driven by 10-11% ARPU CAGR; hence we expect 14-16% EPS CAGR for RIL over the next 3-5 years. Key triggers are Jio’s IPO in the next few months (assuming SEBI norms for large IPOs are notified in the next few weeks) and likely telecom tariff hike post that. Further we expect its net debt to decline gradually because capex will not only moderate (INR 1.2tn-1.4tn p.a. versus INR 2.3tn in FY23 and INR 1.3tn in FY24 and FY25) but, importantly, also be fully funded by a gradual increase in internal cash generation. RIL’s guidance on keeping reported net debt to EBITDA below 1x (0.6x at end3QFY26) also gives comfort. At CMP, RIL is trading near our bear-case valuation of ~INR 1,275/share. At CMP, the stock is trading at FY28E P/E of 16.8x (3-year average: 23.9x) and FY28E EV/EBITDA of 8.2x (3-year average: 11.9x). Key risks: a) weak subs addition and limited ARPU hike; b) sustained muted growth in the retail business; and c) subdued O2C margins due to macro concerns.

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