Reliance Industries is gearing up for its next big leap, charting an ambitious course to unlock its next $50 billion in value creation from its current $240+ billion market cap, by betting big on green energy and generative AI. Backed by strong legacy cash flows and a bold reinvention plan, the Mukesh Ambani-led conglomerate could be entering its most transformational phase yet, according to a Morgan Stanley report.
“We believe new energy and AI infrastructure will drive this next leg, funded by strong earnings from its existing energy business—which could outperform expectations. The consumer business also has solid valuation support,” the brokerage firm said.
At the heart of Reliance’s pathway, Morgan Stanley said, is the integration of its new energy business with AI infrastructure, particularly at its Jamnagar complex. The Gen AI infrastructure in Jamnagar is expected to be ready in two years. To be noted here, RIL sees its New Energy business being “more ambitious, far more transformational, and far more global in scope than anything it’s ever done before”.
The synergy between Reliance’s green push and AI ambitions
RIL is transforming this energy hub to monetize its energy production through powering chemicals, data centers, and refineries, aiming to capitalize on the growing global demand for green energy and AI capabilities.
Reliance had, earlier in its Q3FY25 earnings call, announced that it plans to build a 1GW data center capacity powered by NVIDIA’s Blackwell chips. According to estimates by Morgan Stanley, the 1GW facility alone would need approximately 678k B100 chips. If RIL were to use around 200MW for its own purposes, it would need about 135k B100 chips.
Further, the 1GW facility when scaled up, which normally needs 4-5 years from startup, would require approximately 1.3GW of round-the-clock power, which Reliance’s new energy ecosystem is designed to supply.
Reliance’s new energy vertical
While clean energy and AI form the bedrock of future growth, Reliance’s traditional businesses continue to provide the cash and scale to back this transformation.
Morgan Stanley said that Reliance’s New Energy vertical — spanning solar, batteries, green hydrogen, and carbon capture— is estimated to generate up to $60 billion in value, underscoring its potential as a transformative growth engine. The transition from fossil fuels to electrons will enable RIL to power its refineries, chemical plants, and digital assets sustainably.
The company is expanding its renewable energy footprint. Notably, the group’s 10 GW solar manufacturing chain, targeted for 2026, along with its green hydrogen facility in Kandla, is expected to further reduce costs and enhance vertical integration.
Reliance’s consumer and telecom businesses
RIL’s consumer and telecom businesses continue to be vital growth pillars. According to Morgan Stanley, Reliance Retail is expected to report a 17 per cent top-line growth in F26. This, it added, will be driven by traction in new fashion brands, in-house consumer brands, and quick commerce.
Meanwhile, Jio’s strong subscriber additions and ARPU improvements could lift telecom EBITDA significantly. Reliance’s telecom vertical, Morgan Stanley said, should show 6.5mn subscriber net adds QoQ with a slight increase in ARPU, which is forecasted to rise to Rs 235 by FY27.
Reliance’s O2C vertical
The Oil-to-Chemicals (O2C) segment, often considered a cash cow, is expected to generate an earnings CAGR of 13 per cent over FY25-28. This, per analysis by Morgan Stanley, will be aided by strong refining margins, rising crude discounts, and volume expansion.
The O2C segment alone is expected to benefit from a refining up-cycle, increased domestic fuel sales, rising crude discounts from the Middle East, and chemical margin expansion, with new capacity in PET and PVC slated to come online by 2028 adding further upside. With this, the segment will help fund capex-heavy ventures like AI and clean energy.
To conclude…
Despite underperforming Indian peers in recent years, RIL’s valuation is showing signs of re-rating. Morgan Stanley has maintained an “Overweight” rating.
According to the brokerage firm, RIL’s consolidated EBITDA should rise 16 per cent YoY and consolidated earnings should rise 27 per cent. Sequential earnings, meanwhile, is expected to remain flattish as improvement in energy and retail outlook is negated by higher depreciation and interest cost expensed from 5G monetisation.
In summary, the multi-pronged approach, supported by strong fundamentals in refining, chemicals, retail, and telecom, all working in tandem, Reliance’s roadmap to its next $50 billion valuation looks not just plausible, but imminent.