Reliance Industries Ltd. has experienced one of its worst starts to a year in recent memory, with shares plummeting more than 6% and wiping approximately $15 billion from the company's market value. The steep decline has weighed heavily on India's benchmark equity indices, putting significant pressure on the oil-to-telecom conglomerate as investors await quarterly earnings scheduled for January 16.

Market Performance and Impact

The recent selloff represents a dramatic reversal from the company's strong performance in the previous year, when shares rallied almost 30%. This surge was driven by investor expectations that the conglomerate was preparing to list Jio Platforms Ltd. in what could become India's largest initial public offering.

Retail Sector Concerns

Pressure on Reliance Industries intensified after several of India's largest retailers reported weaker-than-expected consumer demand. As a major player in the retail segment, investors are concerned that Reliance could face similar headwinds from reduced discretionary spending. This development has raised questions about the company's retail business performance in the quarter ending December.

US Legislative Risks

Sentiment deteriorated further following US Senator Lindsey Graham's proposal for legislation targeting countries that purchase Russian oil. This development has cooled investor appetite for Reliance Industries, which has benefited in recent quarters from refining discounted Russian crude. The proposed legislation contributed to pushing the stock's weekly decline past 7%, marking the steepest drop in more than 15 months.

Analyst Expectations

Goldman Sachs Group Inc. analysts anticipate that the company's retail business will report slower growth for the December quarter due to lower discretionary spending. However, they expect this weakness to be offset by strong growth in the energy business. In a January 9 note, analysts including Nikhil Bhandari attributed the recent selloff to "concerns around refining exposure to Russian crude and softer retail growth momentum across peers."

Despite potential moderation in Russian crude volumes, Goldman Sachs analysts believe the company's refining margins will receive support from tight product markets through the next year.

Market Outlook

Reliance Industries maintains strong analyst support, carrying buy recommendations from 35 analysts—the highest number among global oil and gas firms with market values above $100 billion. Even after the recent decline, shares show approximately 16% upside potential over the next 12 months based on consensus target prices, according to Bloomberg data.

Investors will closely watch the January 16 quarterly earnings report for insights into the company's retail performance and guidance that could potentially arrest the current slide in share price.

Goldman Sachs has raised its 12-month price target on Reliance Industries to ₹1,835 per share, implying an upside of approximately 25% from current levels, exactly one week ahead of the company's Q3FY26 earnings announcement. The international brokerage has reiterated its Buy rating, arguing that near-term moderation in retail will be offset by improving refining fundamentals and steady momentum in telecom operations.

Revised Estimates Across Business Segments

In a note dated January 9, Goldman Sachs refreshed its estimates for Reliance Industries by marking assumptions to evolving trends across segments. The brokerage expects Q3 earnings growth in retail to moderate due to weak discretionary spending, base effects, and festive timing considerations. However, this moderation is likely to be partly offset by strong refining-led performance in the oil-to-chemicals (O2C) business, keeping overall earnings largely unchanged despite segment-level adjustments.

Oil-to-Chemicals Business Drives Performance

Goldman Sachs analysts expect strong performance from the refining segment in Q3FY26. The brokerage projects the following metrics for the O2C business:

Refining cracks improved during the quarter amid permanent refinery closures, unplanned outages, and disruptions to Russian product exports, tightening global product markets. Lower Dubai-Brent spreads and easing Saudi crude premiums have improved the cost curve positioning for complex Asian refiners such as Reliance Industries. Goldman Sachs expects refining margins to remain supported into Q4 and through CY27, given structurally tight capacity and limited net additions globally.

Petrochemicals earnings are expected to soften sequentially due to weaker olefins spreads following lower oil prices. While Goldman remains bearish on broader petrochemicals margin recovery due to structural overcapacity, it expects Reliance Industries to continue outperforming peers owing to its cost advantage from ethane cracking economics.

Telecom Segment Shows Steady Growth

In the telecom segment, Goldman Sachs expects a stable quarter with healthy subscriber additions for Jio Infocomm:

For the full year FY26, Goldman forecasts revenue and EBITDA growth of 15% and 20% respectively for Jio Platforms, with non-connectivity businesses growing at a faster 30% clip and now accounting for around 12% of revenues. Over the medium term, Goldman expects Jio to deliver an 18% EBITDA CAGR over FY26-30, supported by continued gains in wireless and home broadband subscribers.

Retail Business Faces Near-term Challenges

The retail arm remains a near-term drag on performance. Goldman has lowered its Q3FY26 sales growth assumption for Reliance Retail to approximately 10% year-on-year from an earlier 12%, citing early festive season effects and lack of sharp recovery in discretionary demand. EBITDA growth is expected at around 6% year-on-year, with some margin pressure from investments in quick commerce and lower operating leverage.

JioStar Integration and Valuation

Reliance Industries has begun reporting JioStar-related data from early CY25, which Goldman now incorporates into its forecasts. The brokerage expects JioStar to deliver an 8% revenue CAGR and an 11% EBITDA CAGR over FY26-30. Goldman values JioStar using a DCF methodology, assuming a 10.50% WACC and a 4% terminal growth rate, yielding a DCF-implied valuation of $12.00 billion, translating into a value of ₹78.00 per share for Reliance Industries on a 100% ownership basis.

Consolidated Outlook

Overall, Goldman expects consolidated EBITDA to grow 6% sequentially and 11% year-on-year in Q3FY26 to approximately ₹48,700 crore. For FY26-28, the brokerage believes steady energy and telecom performance, along with low-teens retail growth, is sufficient to support mid-teens consolidated EBITDA growth.