Reliance Industries is gearing up for the next big leap, unlocking the next $50 billion value creation from its current market capitalization of over $240 billion by creating ambitious courses and placing big bets on green energy and generation AI. A report by Morgan Stanley said Mukesh's Anban-led conglomerate could still be in the most transformative stage, supported by strong legacy cash flows and bold reinvention plans.
“We believe that new energy and AI infrastructure will drive this next leg funded by strong revenue from existing energy businesses. This can exceed expectations. There is also strong valuation support in the consumer business,” the brokerage said.
At the heart of Reliance's pathway, Morgan Stanley said, is the integration of new energy business and AI infrastructure, particularly at the Jamnagar complex. Jamnagar's Gen AI infrastructure is expected to be ready in two years. To note here, Lil considers its new energy business to be “a much more ambitious, far more transformative and much more global scope than anything that has been done so far.”
Synergistic effect of Reliance's green push and AI ambitions
RIL aims to transform this energy hub to monetize energy production by strengthening chemicals, data centers and refineries, and capitalize on the growing global demand for green energy and AI capabilities.
Reliance announced that it plans to build 1GW of data center capacity with Nvidia's Blackwell chips early in its revenue call. Morgan Stanley estimates that a 1GW facility alone requires around 678K B100 chips. If RIL uses about 200mW for its own purposes, it requires an approximately 135K B100 chip.
Additionally, a scale-up 1GW facility that normally requires 4-5 years from a startup requires approximately 1.3GW of 24-hour power, designed to be delivered by Reliance's new energy ecosystem.
Reliance's new energy vertical
While clean energy and AI will form the bedrock of future growth, Reliance's traditional business continues to provide cash and scale to support this transformation.
Morgan Stanley said Reliance's new energy verticals (sunlight, batteries, green hydrogen, carbon capture) are estimated to generate value up to $60 billion, highlighting the potential as a transformational growth engine. The transition from fossil fuels to electronics allows RIL to sustainably power refineries, chemical plants and digital assets.
The company is expanding its renewable energy footprint. In particular, the group's 10 GW solar manufacturing chain, targeted for 2026, and Kandra's green hydrogen facility, are expected to further reduce costs and enhance vertical integration.
Reliance's Consumer and Communications Business
RIL's consumer and telecommunications business continues to be a key growth pillar. According to Morgan Stanley, Reliance Retail is expected to report a top-line growth of 17% for the F26. It added that this will be driven by new fashion brands, in-house consumer brands and quick commerce traction.
Meanwhile, the addition of strong Jio subscribers and improvements to the ARPU could significantly increase communications EBITDA. According to Morgan Stanley, Reliance's communications vertical should indicate that the 6.5mn subscriber net will slightly increase the ARPU and add QOQ, which is projected to rise to Rs 235 by fiscal year 275.
Reliance's O2C Vertical
The Chemicals (O2C) segment from petroleum, often considered cash cows, is expected to generate a revenue CAGR of 13% in fiscal 2025-28. This is supported by strong refinement margins, increased crude oil discounts and increased volumes with each analysis by Morgan Stanley.
The O2C segment alone is expected to benefit from improved upcycles, increased domestic fuel sales, increased crude oil discounts from the Middle East, and increased chemical margins. This will help fund Capex Heavy Ventures like AI and Clean Energy.
Draw a conclusion…
Despite poor performance from its Indian peers in recent years, RIL ratings have shown signs of a reassessment. Morgan Stanley maintains his rating of being “overweight.”
According to the brokerage, RIL's integrated EBITDA should rise 16% year-on-year, while integrated revenue should rise 27%. Meanwhile, energy improvements and retail outlook are expected to continue flattening as energy improvements and retail outlooks are denied by reducing depreciation and interest costs spent on 5G monetization.
In summary, the multifaceted approaches supported by strong foundations of refinement, chemicals, retail and communication all work on Reliance's roadmap for the next $50 billion valuation.
