Fast-fashion rival Trent Ltd on Monday reported a 15% decline in average revenue psf of store space in the December quarter from a year ago, indicating a tough environment for Indian retailers. Citigroup Inc said that intense competition in the sector was eroding incumbents’ market share.
Reliance’s retail business is often seen as one of the biggest drivers of its stock price, with ICICI Securities valuing the business at more than US$103 billion in October — about half of the company’s US$226 billion market value. Although the retail unit is closely held, weak commentary around Trent was viewed by investors as a sector concern that could also hurt India’s largest retailer.
Selling pressure increased as investors took profits in stocks that have rallied in recent months. Reliance shares jumped 29% in 2025, beating the benchmark NSE Nifty 50 Index’s 11% gain.
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The outperformance was driven by improving prospects for the company’s energy business, supported by higher gross refining margins and potential benefits from China’s so-called anti-involution policy for the refining sector.
Morgan Stanley sees several growth catalysts for Reliance in 2026, including the initial public offering of its digital venture Jio Platforms Ltd, a likely increase in telecom rates and an upside to refining margins due to benign oil prices.
Still, uncertainties around US tariffs on India as well as the patchy recovery in consumer demand could continue to weigh on the stock. The shares also trade at more than 23 times forward earnings, more than one standard deviation above the five-year average, data compiled by Bloomberg showed.
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Traders are also concerned about how Reliance will offset its supplies of Russian crude oil, which it secured at a discount following the Ukraine war in 2022.
“If India is to completely stop refining Russian oil, then it has a wider impact on Reliance as well as Indian state companies and this uncertainty is also dragging on the stocks,” said Deven Choksey, managing director at DRChoksey FinServ.
Shares of state-run refiners Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd slipped about 2% each in Mumbai.
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