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RIL Enters Fourth Monetization Cycle: Morgan Stanley Bullish
17 Dec, 2025
Summary
- Reliance Industries poised for re-rating as all major businesses become cash-flow positive.
- Refining business expected to generate US$7-10 billion in net asset value.
- Telecom ARPU projected to rise at 9% CAGR through 2028 with 5G adoption.
Reliance Industries is entering its fourth major monetization cycle, marked by a significant inflection in cash flows across all key business verticals. Morgan Stanley predicts that by 2026, all of RIL's energy, consumer, and telecom businesses will achieve free cash flow positivity simultaneously, a first for the company. This convergence is expected to trigger a substantial valuation re-rating, mirroring historical performance during similar phases.
The refining sector is identified as a particularly strong, yet underappreciated, segment. With refining margins near US$14/bbl, this 'golden age' for refining is estimated to contribute US$7-10 billion in net asset value. Concurrently, Jio's telecom operations are evolving into robust cash generators, with ARPU forecasted to grow at a 9% CAGR through 2028, supported by 5G upgrades and new AI-driven offerings.
Further catalysts for earnings upgrades are anticipated throughout 2026, including retail growth and a recovery in chemicals. Morgan Stanley also points to optional upside from new ventures in AI infrastructure and energy storage. With a bullish outlook for 2026, the brokerage advises investors to capitalize on this emerging monetization cycle.
