Reliance Industries Ltd.

At the same time, RIL's digital segment is exposed to stiff competition and regulations in India's telecom market. Following the debut of Jio in fiscal 2016, the country's telecom market has undergone a series of market consolidation due to heavy losses and low margins arising from price competition. India now has just three private telecom operators, from nine previously, with Jio holding the largest market share of wireless subscribers as of end-2019. The stable outlook reflects our expectation that RIL's strengthening cash flows amid disciplined spending will improve its debt-to-EBITDA ratio toward 2.0x over the next 12-24 months. We assume the company will primarily use proceeds from the 9.99% stake sale in Jio for deleveraging. We could lower the rating

...We expect Reliance Industries Ltd. (RIL) to maintain its leadership position in Asia's oil refining industry. RIL is one of the largest and most complex refiners globally. Its refineries have a processing capacity of 1.2 million barrels per day (bpd), and the Jamnagar site's complexity index of 21.1x is well above the average. This, coupled with the high integration of its petrochemical facilities and refining business, has enabled RIL to maintain more stable and higher profitability in the energy segment than its peers. Our base case assumes that RIL's total EBITDA margins will be in the 15%-20% range over fiscals 2021 and 2022 (year ending March 31). RIL's resilient earnings from its digital and retail segments should offset weakness in the energy division. We expect RIL's overall operations to remain resilient and have flattish EBITDA in fiscal 2021, before rebounding in fiscal 2022. This is despite weakening operating conditions in the oil refining and petrochemical segments. RIL's...

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