LONG VIEW 24 May 2023

India Internet and Asia-Pacific Oil & Gas

The Long View : India eCommerce - A 150 Bn Dollar market. Three
players. One Disruptive Playbook

E-Commerce is a concentrated market globally. Amazon has 40%+ share in the U.S. Alibaba
Rahul Malhotra
+65 6230 2344 has 60%+ share in China. India is evolving into a three-player market with Top 3-Amazon,
[email protected] Walmart & Reliance. The conventional retail business model starts out either offline (Walmart)
or online (Amazon). Given distribution challenges and India’s propensity to “skip a generation”
Neil Beveridge, Ph.D. in most technologies, we believe Indian E-Commerce market will be different. An integrated
+852 2918 5741
[email protected] model (offline + online + prime), strong distribution capability and superior cost advantage
(against online players) are required from the start.
For the exclusive use of [email protected].

Sanjit Shinde
+91 226 842 1469 Reliance Jio's disruptive playbook: Reliance Industries (market cap of US$180 Bn) is
[email protected] building the largest digital ecosystem in India. Jio has 430 Mn mobile subscribers. Its digital
ecosystem is compelling. Its retail arm has 18,300 retail stores in India (US$30 Bn sales,
Brian Ho, CFA
+852 2918 5772
EBITDA +ve ~7.5%). Digital mix is scaling up ~17-18% ($ 6 Bn, ecommerce ). It’s a disruptive
[email protected] playbook – integrate offline + online + prime makes it the strongest competitor to Amazon/
Walmart.

Market structure: India is one of the few large and under-penetrated E-Commerce markets.
The market is expected to reach ~US$150 Bn by 2025, with online penetration doubling
in the next 5 years. Flipkart ($23 Bn GMV) & Amazon ($18-20 Bn GMV) lead on scale with
~60% market share. Reliance is No 3 (~$ 5.7Bn e Com sales) driven by attractive categories
of Fashion (Ajio) & JioMart (E-Grocery). All 3 players are focused on -Get Big (scale), Get Close
(customer loyalty) & Get Fit (profitability).

Consumers want offline + online + prime bundled: Indian consumers are being
conditioned to expect an integrated value proposition, offline + online (E-Commerce, private
brands) + prime (entertainment, OTT, gaming). Companies are bundling services to capture
value from the real + virtual economy.

Get Big & Get Close : E-Commerce companies are focused on — acquiring scale (Get Big),
building loyalty (Get Close). E-com companies are expanding TAM by going deep into Tier
2/3 markets & on niche premium categories (e.g. Beauty). Get Close is led by loyalty/prime
programs. Amazon has ~15% of its active customers as prime members.

Focus on profitability (Get Fit): E-Commerce players are focusing on Get Fit (profitability)
while balancing Get Big (scale). Few factors that have enabled improving margins incl. (1)
Fashion (superior margins) has become the largest e-Commerce category capturing ~25% of
GMV ahead of Mobile phones. (2) Mix of Ad sales (>80% GM%). (3) Increase in private labels
as E-Commerce companies look to expand from low single digit margins.

We believe Reliance Retail/Jio is the best positioned player in the largest and fastest
growing E-Commerce market. The advantages of its retail network, mobile network,
digital ecosystem and “home field advantage” in a famously complex regulatory and
operating environment mean in the Long Term, it will likely claim the lion’s share of
the US$150 Bn+ eCommerce marketplace.

See the Disclosure Appendix of this report for required disclosures, analyst certifications and other www.bernsteinresearch.com
important information.
First Published: 24 May 2023 10:30 UTC  Completion Date: 24 May 2023 09:49 UTC
 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

BERNSTEIN TICKER TABLE

23 May TTM Reported EPS Reported P/E (x)
2023
Closing Price Rel.
Ticker Rating Price Target Perf. 2022A 2023E 2024E 2022A 2023E 2024E
RIGD.LI O USD 58.90 90.90 (7.1)% USD 2.73 2.96 3.86 21.6 19.9 15.3
OLD 96.30 4.39
RIL.IN O INR 2,454.55 3,030.00 (3.0)% INR 98.59 128.68 155.37 24.9 19.1 15.8
OLD 3,210.00
EM 1,102.39 107.17 89.80 102.52 10.29 12.28 10.75
ASIAX 1,159.21 104.10 87.11 102.67 11.14 13.31 11.29
PRICE TARGET CHANGE / ESTIMATE CHANGE IN BOLD O - Outperform, M - Market-Perform, U - Underperform, NR - Not
Rated, CS - Coverage Suspended
RIL.IN base year is 2023;
Source: Bloomberg, Bernstein estimates and analysis.

INVESTMENT IMPLICATIONS

The Indian economy despite some slowdown continues to be one of the leading centers of growth. India's GDP is expected to
For the exclusive use of [email protected].

reach US$5.2 trillion by 2025. Per capita GDP is expected to double in that period. The power of demographics makes this an
especially important consideration for India, as it represents ~18 % of global population.

Consumption spending continues to accelerate. The 24 Mn affluent households (annual income > US$15,000) in 2016 will
become 50 Mn households by 2025. The large number of affluent households make India a very attractive market.

Digitization is being driven by adoption of 4G. India has one of the lowest 4G data prices in the world (~$0.25/GB) and the
highest per capita mobile data consumption in the world (8 GB/month). In all, 530 Mn people have access to the internet making
India second-largest user base for digital economy after China. The number of internet users in India is expected to grow to ~1
Bn by 2025 with 33% of them (330 Mn) becoming online shoppers.

Reliance Industries (RIL) has seen this coming. Since 2015, RIL has built: (1) Reliance Retail into a 18,000+ store nationwide
chain with GMV of US$30 Bn, (2) a dominant 4G network (430 million subscribers) in Reliance Jio, and (3) a strong digital media
platform OTT/IPL, music streaming, news through strategic acquisitions. This makes RIL the only Indian player to have an
integrated (offline + online + prime) offering and the ability to compete with global tech giants (Amazon, Walmart).

All the global giants are present in the Indian market, either through organic setups (Amazon, Google, Facebook, Netflix and
Apple) or investments/acquisitions (Walmart). They have been successful in digital advertising (Google and Facebook). However,
the largest opportunity lies in e-Commerce + entertainment, where winners would be determined by the most compelling
integrated value proposition. Currently, only Reliance (Jio + Reliance Retail) and Amazon have such a platform.

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Table of Contents

LINKS TO OUR RECENT NOTES....................................................................................................................................................................................... 3

1. INDIA INTERNET LANDSCAPE......................................................................................................................................................................................4
2. INDIA RETAIL & ECOMMERCE MARKET................................................................................................................................................................... 4
3. INDIA ECOMMERCE LANDSCAPE............................................................................................................................................................................... 7
4. DEEP DIVE INTO ECOMMERCE PLAYERS:............................................................................................................................................................10
A. Reliance retail : Building an integrated offline plus eCommerce ecosystem.............................................................................................. 11
I. Offline Retail - RIL continues its aggressive store expansion.................................................................................................................... 13
II. Digital Commerce......................................................................................................................................................................................................14
III. New Commerce - Tapping into the huge unorganized retail segment..................................................................................................16
IV. Reliance Brands - Building a strong portfolio of brands........................................................................................................................... 18
B. Flipkart (private, ~80% owned by Walmart)........................................................................................................................................................... 20
C. Amazon India (100% owned by Amazon Inc)........................................................................................................................................................ 21
For the exclusive use of [email protected].

D. Meesho (private, FOCUSED ON TIER 2/3 geos)..................................................................................................................................................22

5. COMPANY VALUATION.................................................................................................................................................................................................. 24
Revision in Estimates — RElIANCE Retail.............................................................................................................................................................24
Revision In Estimates — RELIANCE Jio................................................................................................................................................................. 25
6. RELIANCE E-COMMERCE APPS & RETAIL STORES..........................................................................................................................................27

DETAILS

LINKS TO OUR RECENT NOTES

Reliance Retail : Market leader in India retail - a deep dive (May 2023)

Reliance Jio - On the path to 500 Mn subscribers (May 2023)

India Internet : Digital Advertising- 'Engagement is our religion' - A Primer (Mar 2023)

India Internet: Online Grocery & Quick Commerce - A Primer (Mar 2023)

India Internet: Profitability takes center stage...again (Mar 2023)

India Internet - Primer on E-Commerce - Get Big, Get Close, Get Fit (Jan 2023)

India Internet: 2023 Outlook: The "Great Reset" (Jan 2023)

India Internet - OTT streaming battles - 'IPL' vs 'Squid Games' (Mar 2022)

India Internet - State of digital advertising - 'attention comes at a premium' (Mar 2022)

India Internet - Who is winning eCommerce in India ? (Mar 2022)

Reliance Retail: King of India Retail (Feb 2022)

The "TAM"inator: Sizing markets, fears, and dreams - Reliance Jio - Unlocking a Trillion Dollar TAM (Feb 2021)

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1. INDIA INTERNET LANDSCAPE

India Ecommerce: The Indian e-Commerce market is the largest opportunity in the Indian internet ecosystem. It is expected
to reach US$133 Bn by 2025 from US$ 24 Bn in 2018, a 5x market, with ~30% CAGR. This is a US$100 Bn incremental
opportunity with only three scaled players in the market (Walmart, Reliance Jio and Amazon). The winner in the Indian E-
Commerce market will be the one with the most compelling integrated value proposition, offline + online + prime. Reliance
Jio has the most disruptive playbook, using an integrated approach to consumers – US$18 Bn GMV (Reliance retail), 355 Mn
consumers (Reliance Jio) and compelling prime apps (JioTV, MyJio, JioSaavn and Jio Prime).

EXHIBIT 1: India Internet Landscape

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Source: Company Filings/Reports, News Articles/Reports, Bernstein Analysis & Estimates

2. INDIA RETAIL & ECOMMERCE MARKET

India's retail market is dominated by the unorganized sector (~88%). However, the mix is expected to change with organized
retail gaining share and e-commerce accelerating. The food & grocery market is the largest retail category in India, accounting
for ~75% of the market share, and we expect it to grow at 9% CAGR (2023-2030) to reach USD1,277 Bn by 2025.

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EXHIBIT 2: India's retail market is dominated by EXHIBIT 3: Food and grocery account for ~80% of the
unorganized retail retail category in India (USD bn)

US$ 676 Bn US$ 1,277 Bn

3.6% 10.4% 1,277
8.4%
105
14.6% 1,063 120
78 110
96
94
676
48
88.0% 501 60
60
75.0% 33 942
43
45 795
508
380

2018 2025E 2015 2018 2023 2025

Food & Grocery Apparel & Acces.
Unorganized Organized Retail Ecommerce Jewelry & Watches Consumer Electronics
For the exclusive use of [email protected].

Source: Technopak, Bernstein estimates and analysis Source: Technopak , Bernstein estimates and analysis

eCommerce market: We expect E-Commerce to grow 27% to reach $133 Bn + by 2025. The number of internet users in India
is expected to grow to ~1 Bn by 2025 with 33% of them (330 Mn) becoming online shoppers. The TAM is expanding with new
opportunities in social commerce/quick commerce/brands. Reliance is building a deep private labels ecosystem; Reliance is
acquiring Dunzo (Quick commerce) to scale JioMart.

EXHIBIT 4: India E-Commerce to reach $133 Bn, EXHIBIT 5: India's E-Commerce market could grow at27%
aspenetration increases to 10%+ by 2025 CAGR to $133 Bn by 2025

140 133 12.0%

120 133
10.0%
10.4%
100 110
8.0% 27%

80 89
6.0%
60 72
3.6%
4.0% 57
40
24 40
2.0%
20

0 0.0%
2018 2025

Market Size ($Bn) Penetration

2020 2021 2022 2023 2024 2025

Source: Technopak, Bernstein estimates and analysis Source: Bernstein estimates & analysis

India eCommerce underpenetrated: Markets like India are still very early from an eCommerce penetration perspective.
We see room for increase in penetration, whereas markets like China, Korea have nearly doubled the penetration to between
27-30%. India has low penetration, but the growth of the eCommerce market should accelerate, led by Reliance, Amazon &
Flipkart and the increasing share of Tier 2+ cities. Like other markets (US, China), we expect eCommerce share to consolidate

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with the top 3 players expected to have ~90% market share across Amazon, Flipkart and JioMart.

EXHIBIT 6: E-Commerce share of retail EXHIBIT 7: Internet users (in Mn) EXHIBIT 8: Top 3 players share of
eCommerce
45% 1060
90%

720 70%

50%
15%
310

7%

China US India China US India

China US India

Source: eMarketer - June 2022, Mary Marker Internet Source: Dentsu Aegis network digital report,
report, Tenba group, Bernstein analysis eMarketer, Mary Marker Internet report, Nielsen’s Source: eMarketer, Mary Marker Internet report,
India Internet Report 2023, Bernstein analysis Tenba group Bernstein analysis

EXHIBIT 9: Global eCommerce penetration

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45.0% 41.0%
39.3% 40.1%
37.6% 38.4%
40.0% 36.7%
35.2%
33.7%
35.0% 30.9%
29.2%
30.0% 25.7% 26.0%
24.4%
22.8%
25.0% 21.3%
19.8% 19.7%
18.1%
20.0% 16.7% 16.7%
14.6% 14.6% 14.7% 15.4% 22.0%
19.5% 20.8%
15.0% 11.1% 17.0% 18.3%
9.9% 14.5% 15.8%
13.3%
10.0% 11.8% 12.3% 12.0% 12.7% 13.2%
11.0% 11.6% 12.1%
7.3% 8.3% 9.4% 10.4%
5.0% 8.4%
6.4% 7.4%
3.6% 4.3% 5.0%
0.0%
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

US India Global (ex. China) China

Source: eMarketer, Bernstein estimates and analysis

India eCommerce funnel: India is seeing an expanding & mature internet user base across metros, Tier 1 & Tier 2 cities. Tier2+
user base is transacting for services/products and heavily using social media. The mix has increased from 5-7 years earlier when
E-commerce was largely driven by Metro/Tier1 cities with Tier 2+customers 50%+ of the online shopper base.

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EXHIBIT 10: India Internet funnel by City tier (Population in Mn)

1,360 700 630 560 350 190

57%
70%
80% 79% 78%
86%

16%
12%
9% 11% 10%
27%
7% 18%
7% 11% 10% 12%

India Population Internet Users Smartphone Users Social Media Users Online Transactors Online Shoppers
Metro Tier 1 Tier 2
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Source: Redseer, Bernstein analysis, Tier 2 includes cities outside top 45-50

3. INDIA ECOMMERCE LANDSCAPE

We believe Reliance Retail/Jio is the best positioned player in the largest and fastest growing E-Commerce market.
The advantages of its retail network, its mobile network, its digital ecosystem and its “home field advantage” in a
famously complex regulatory and operating environment mean in the Long Term, it will likely claim the lion’s share of
the US$150 Bn+ eCommerce marketplace. Current ecommerce market structure:

E-commerce is led by Big 2 (Flipkart /Amazon) ~60% market share. Both platforms provide the widest selection in core
categories and fast and reliable delivery. Flipkart was the first mover in E-Commerce in India. Flipkart's GMV was at ~$15
Bn in FY20 and $23 Bn GMV (Incl. Myntra) in FY21. Reliance Retail recent Q4FY23 results provided its digital mix (proxy for
eCommerce) at $ 5.7 Bn. Meesho is currently at $5 Bn+ GMV.

EXHIBIT 11: GMV/Sales ($ Bn) across eCommerce/retail players

~23

18-20
5.5 17.7

5.7

5.0 5.0
4.5

1.7 1.4

Flipkart Amazon Reliance Meesho Dmart Titan Kalyan Aditya Birla

Jewellers

Source: Bloomberg, press reports, Bernstein estimates & analysis

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 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

(1) Focus on multiple services with large TAM – We expect Jio to become the core platform for India's digital economy. As
more consumers and small business move online, we see an expansion of India's digital TAM which we expect would reach
a trillion dollars by 2025. The launch of JioMart to build eCommerce. Partnership with Facebook1 to build a communication
platform for customers/small businesses through WhatsApp Business. Payment transactions through WhatsApp Pay. Deep
content distribution of Jio apps. We view this capability as Jio's strength in the digital economy and a core component of India's
digital ecosystem. We expect the following businesses where Jio can create strong competitive moat.

EXHIBIT 12: TAM, key competition and offerings across different segments
2025 TAM
Type of offering Key competition Jio apps Remarks
size ($Bn)
Ecommerce 133 Flipkart, Amazon JioMart, Ajio Best positioned for eGrocery
B2B commerce 128 Flipkart, Amazon Jiomart Deep merchant relationships
OTT 6-7 Netflix, Prime, Hotstar JioTV, JioCinema 400Mn+ subscribers
Payments ~1000 Paytm, Google Pay, Phonepe Jio Financial Services Option value through Whatsapp pay
FTTH ~5 Airtel, ACT, BSNL Jio Fiber Home broadband
Enterprise/cloud ~10 AWS, GCP Jio Cloud Partnership with Microsoft Azure
Advertising ~20 Facebook, Google JioTV, JioCinema Through media, gaming apps
Gaming ~6 Dream 11, Nazara, MPL JioGames JioGames has ~50 games
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Source: Technopak, eMarketer, Gartner, Bernstein estimates and analysis; FTTH stands for Fiber To The Home

(2) Fashion has become the largest category in eCommerce: Fashion has become the largest category with ~25% GMV
share and grew 40%+ in 2022 while Mobile category grew 7% in 2022. India added 40 Mn+ online shoppers in CY22 (~16 Mn
added from Fashion). Reliance is strongest positioned in Fashion with Ajio and Reliance Trends (~20% market share).

EXHIBIT 13: E-tailing category shares (%) EXHIBIT 14: Online shoppers added (mn)

100% 45
90% 40
40
80%
70% 35
60%
30
50%
40% 25
30% 20
20
20%
15 15
10% 15

0%
10
2018 2019 2020 2021 2022P

Mobiles Electronics + Large 5

Fashion Home
0
Grocery Others CY15 CY20 CY21 CY22F

Source: Redseer, Bernstein estimate & analysis Source: Redseer, Bernstein estimate & analysis

(3) Moving from Get Big/Get Close to Get Fit/Get Deep: E-Commerce companies in India have scaled up well 'Get Big Fast
& Get Close (Amazon Prime). Now the key focus is on Get Fit and Get deep (expanding deeper into Tier2/3 markets). Reliance
is the only profitable business at 6-7% EBITDA while both Amazon & Flipkart are negative EBITDA. Reliance Retail is deep in
Tier2/3 markets with ~70%+ stores in those markets.

1 
Facebook is covered by Bernstein's Mark Shmulik

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EXHIBIT 15: How are Ecommerce players fitting in?

Platform Get Big Get Close Get Fit Get Deep
Reliance Strongest positioned in eGrocery. Building app ecosystem (JioTV, Increase mix of private labels. Focus on New commerce to
JioMart New/eCommerce at ~18% of core JioPrime) and creating stickiness Offline profitable at 6-7% EBITDA digitize the kirana stores. Deep
retail. Digital orders grew 2x yoy. for its telco subscriber base margin. footprint in Tier 2/3
Merchant partners orders up 4x
Amazon Market leader (~30%) in core Prime membership reaching scale Focus on build private labels Expanding merchant relationships
categories (electronics, mobiles). ( ~24 hour delivery, video OTT). Improve take rates better in Tier 2/3 markets
Less competitive in Grocery, BPC Low churn, sticky Tier1 client base category mix
etc
Flipkart Market leadership (~30%) in Flipkart Plus loyalty program with Private labels, improve category Launced Flipkart Shopsy to enter
mobiles & appliances.Leader in no membership fees. Partnership mix, leadership in high margin social commerce & compete with
apparel with ~2x of closest with Disney/Hotstar to provide Fashion category Meesho
Meesho Building unique selection of Focused on low income shoppers Prioritizing growth. Zero merchant 400K+ sellers, deep product
unbranded products for Tier 2/3 outside big cities. Lowest price commission, advertising revenues listings of 60 Mn+. Unique
markets. 100 Mn+ app downloads. points unbranded selection
6x GMV growth yoy in 2021.

Source: Company reports, Bernstein analysis

(4) Strong partnership network: Reliance has built a deep digital ecosystem across ecommerce, entertainment and Financial
services which positions it well with end customers. Reliance has access to ~500 Mn subscribers to cross sell/up-sell these
digital services.
For the exclusive use of [email protected].

EXHIBIT 16: Partnerships / Investments in the digital ecosystem

Flipkart Amazon Reliance

Commerce / Flipkart.com, Myntra, BestPrice, 2- Amazon.com, Amazon Business, Reliance Digital, Trends, Fresh, Ajio,
marketplace Gud Shoppers Stop, More, Amazon Food JioMart, Fynd, Urbanladder

Amazon Prime Video, Amazon Music, Jio Cinema, Jio TV, Eros, Network 18,
Entertainment Hotstar, gaana.com
Kindle, Audible, Fire TV Jio Music, Jio Mags

Loyalty programme Flipkart Plus Amazon Prime Reliance One, Jio Prime
Apollo Pharmacies (planned), Amazon
Health/Pharmacy Flipkart Health JioHealthHub, NetMeds
pharmacy
Flipkart Pay Later, Flipkart Axis Bank Amazon Pay, Capital Float, ICICI Bank,
Financial Services Jio Money, Jio GST, Jio Payments Bank
credit card, Axis Bank Acko
Logistics / Repair Ekart, MapmyIndia, F1 Info
Amazon Logistics Reliance Logistics, Grab
Services solutions, Jeeves
Amazon Web Services, Amazon Netradyne, Jio Cloud, JioChat,
Analytics / Cloud
Advertising Whatsapp/Facebook
Whatsapp/Facebook, Roposo
Social Commerce Shopsy, Moj GlowRoad (Acquisition)
(planned)

Source: Company reports, Bain, Bernstein analysis

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EXHIBIT 17: Jio at ~440 Mn subs & expected to reach ~500 Mn subs by FY25

506
493
476
439
426
410

FY21 FY22 FY23E FY24E FY25E FY26E

For the exclusive use of [email protected].

Source: Company reports, Bernstein estimates and analysis

(5) FDI Regulations disallow non-Indian e-Commerce firms from running the 1P model in India or owning a >25%
equity stake in a seller on its platform. There are draft policies discouraging exclusive seller partnerships or deep discounting
and mandating local storage of customer data. Category mix determine 3P vs 1P model: Categories like Grocery (Fresh) have
traditionally used a 1P or inventory led model. The inventory control and management of supply chain logistics are essential to
maintain the customer experience. Grocery is a large category in retail (70%+). Reliance has ~20% of revenues coming from
Grocery.

The 1P model gives the advantages of inventory control, pricing & better customer experience. The seller ecosystem in India
is also less evolved to execute a pure 3P model. In comparison, more than 80% of China ecommerce GMV is based on a 3P
model. 3P enables a longer-tailed marketplace and wins in terms of SKU depth – and in China, it is simpler given merchants are
typically responsible for fulfillment via express delivery companies.

EXHIBIT 18: E-Commerce business practices and regulations

Business practice Regulation
India's FDI (foreign direct investment) rules do not allow 100% foreign investment in multi-brand retail. However,
Inventory vs
100% FDI is allowed in online marketplace models. Both Amazon and Walmart (Flipkart) operate through a
marketplace model
marketplace model with affiliate sellers (with equity stake) and third-party sellers.

Equity interest in The policy states that no single seller can have more than 25% share on a foreign-owned online marketplace.
sellers Both Amazon and Flipkart have reduced their stakes in affiliate sellers from 49% to 24%.

Exclusive deals, deep The government has made it clear that no e-commerce marketplace platform can mandate a seller to sell
discounts exclusively on the platform. It has also clamped down on deep discounts e-commerce platforms.

Data localization/ KYC The data localization regulations require payment apps to require storing all payments data only in India. The KYC
(know your customer) regulation have changed to stop Aadhar based e-KYC and pivot to in person physical KYC

Source: Bernstein analysis

4. DEEP DIVE INTO ECOMMERCE PLAYERS:

We benchmark the top 3 ecommerce players below and deep dive on each (1) Reliance Retail (2) Amazon India and Flipkart.

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EXHIBIT 19: Benchmarking the eCommerce players

Metric Flipkart/ Walmart Amazon India Reliance Retail / JioMart

Gross merchandise value ~ $5.5 Bn Sales; ~32% of Reliance

~$23 Bn GMV ~$18-20 Bn GMV
(Sales/GMV) core retail sales
150Mn+ products across 80+ ~170Mn products across 100+
Number of products Not available for JioMart
categories categories
1P (inventory led), 3P (kirana store end
Business model 3P marketplace (seller driven) 3P marketplace (seller driven)
marketplace)
~3 Mn merchant partner network for
Sellers on the platform ~450,000 ~700,000
Digital commerce
~55% mix is consumer electronics /
Category mix ~35% mix is apparel/lifestyle ~80% is Grocery
smart phones
~8% stake in Aditya Birla Fashion 49% stake in More (Grocery)
Mix of kirana stores and Reliance
O2O Platform 5% stake in Shoppers Stop; In talks smart; ~3-4k own stores
~27% stake in Arvind Youth Brands
to acquire Ecom express
Best Farms, GoodLife, Masti Oye,
Solimo, Amazon Basics, Symbol,
Private labels MarQ, Perfect Homes,Smart Buy Kaffe, Enzo, Mopz, Expelz and Home
Vedaka, Presto
One
Payments PhonePe Amazon Pay JioPay, WhatsApp pay
Inhouse (~80%) Inhouse (~80%)
Logistics Ekart Logistics Amazon transport services Reliance Logistics / Grab / Dunzo
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~80 fulfillment centers ~60 fulfillment centers

Source: Press reports, Company reports, Bernstein analysis

A. RELIANCE RETAIL : BUILDING AN INTEGRATED OFFLINE PLUS ECOMMERCE ECOSYSTEM

Globally, the internet space/E-Commerce is concentrated across different services. All major companies such as Apple, Google,
Amazon, Facebook, etc. are providing more and more products and services to dominate in multiple sub-sectors. The strategy is
to increase traffic and cross-sell and upsell through deep understanding of data (AI).

• Traffic: High-frequency services can attract traffic for low-frequency services. As all companies try to attract more new users,
the traffic acquisition cost is ever-increasing. Companies that have a large organic traffic would be at an advantage. Jio has
355 Mn of users that it can cross-sell multiple services to.

• Data: With more products and services, companies will be able to obtain more information about customers. Armed with
AI breakthroughs, the companies can utilize such data to provide tailored products and service offerings for individual
customers.

Reliance Jio digital ecosystem: Reliance has built strong digital applications and digital platforms, both organically and
through acquisitions.

1. Offline Retail - Offline retail comprises ~18K+ stores across various small scale and large scale store formats. This includes
formats such as SMart (grocery), Reliance Digital (electronics), Reliance Trends (Fashion). Offline is driven by aggressive store
expansion and depth in scale and execution.

2. Digital Commerce - Retail operates online platforms across the same consumption baskets as in offline retail, to tap into
the increasing propensity of Indian consumers to order online. Digital Commerce/eCommerce continues to scale rapidly as
Indian consumers look for a wider selection of products and convenience. Its core platforms are spread across eCommerce
and Grocery and include AJIO, Reliancedigital.in, and JioMart - the grocery B2C businesses. New business like Netmeds (daily
orders up ), Zivame, Amante, Clovia (up 88% YoY), Urban Ladder (Catalogue up ~2x) continue to scale rapidly.

3. New Commerce - New Commerce is Reliance Retails B2B initiative, where it looks to onboard and digitize India's ~15-20 Mn
kirana stores and lets RIL retail tap India's large unorganized retail market. It currently has ~3 Mn+ merchant partners, which
are empowered by New Commerce to modernize and become more efficient.

4. Reliance Brands - Reliance has been building a strong brand portfolio, which they can exclusively market through their
ecosystem. Its strategy in developing a brand portfolio includes a mix of acquisitions, partnerships and private labels. Indian

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affluent consumers are increasingly focusing on premium brands that improve their lifestyle choices. This has resulted in
premium becoming the fastest growing category.

EXHIBIT 20: Reliance Retail: Deep ecosystem across offline, eCommerce/new commerce & private brands
For the exclusive use of [email protected].

Source: Company reports, Press reports, Bernstein analysis

Reliance Retail: Reliance Retail is the largest organized retailer in India. Revenues of ~US$30Bn, ~2.5x the combined scale
of the next 3 Indian retailers. Market leadership is driven by expanding store network (1.5x over last 2 years), acquiring new
brands ($1.2 Bn investments), & eCommerce/New commerce (~18% mix). Growth has been robust ( ~20% YoY), in line with
peers with healthy margins of 7.7%. In this note, we deep dive into key segments of Reliance Retail - Offline , eCommerce/ New
Commerce, and its Brand Portfolio.

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EXHIBIT 21: Reliance Retail Revenue (US$ Bn) EXHIBIT 22: Reliance Retail EBITDA

2,500 8.0%
2,241
32.5 7.0%
6.2% 6.2%
2,000 5.9% 6.9%
30% 6.0%
CAGR 4.7% 1,548
25.0 5.0%
1,500
3.7% 1,207 1,224
20.4 19.7 4.0%

16.3 1,000
775 3.0%

2.0%
500
8.6 316
1.0%

- 0.0%
FY18 FY19 FY20 FY21 FY 22 FY23

FY18 FY19 FY20 FY21 FY 22 FY23 EBITDA (US$ mn) EBITDA margin
For the exclusive use of [email protected].

$ = INR 80 $ = INR 80
Source: Company reports, Bernstein analysis Source: Company Reports, Bernstein Analysis

I. OFFLINE RETAIL - RIL CONTINUES ITS AGGRESSIVE STORE EXPANSION

Reliance Retail has been adding stores at a solid pace. RIL expanded its store footprint to 18,040 stores, adding ~2.8K stores
for FY22-23. The store base occupied ~65.5 Mn Sq. ft nearly double of what it was at the end of FY21. It has been adding
~2,000-3,000 stores every year across store formats. While bulk of its stores are comprised of small format Jio Digital stores
under Connectivity, it has a large network of grocery stores ~3.5K+ and ~5K+ fashion and lifestyle stores.

EXHIBIT 23: No. of Operational Stores & Growth EXHIBIT 24: Total Area of Operational Stores (Mn Sq. Ft.)
18,040

65.6
17,225
16,617

20,000 8% 70 22%

60.2
15,866
15,196

18,000
14,412

54.7
7%
13,635

60
12,803
12,711

16,000
12,201

17%
11,931
11,806

6%
45.5

14,000 50
41.6
40.0

5%
37.3

12,000
34.5
33.8

12%
40
31.2

10,000 4%
29.7
29.0

8,000 3% 30
7%
6,000
2%
4,000 20

2,000 1% 2%
10
- 0%
1QF21

2QF21

3QF21

4QF21

1QF22

2QF22

3QF22

4QF22

1QF23

2QF23

3QF23

4QF23

- -3%
1QF21
2QF21
3QF21

4QF23
4QF21
1QF22
2QF22
3QF22
4QF22
1QF23
2QF23
3QF23

No. of Stores QoQ Growth

Stores Sq. Ft. (Mn) QoQ Growth

Source: Company reports, Bernstein analysis

Source: Company reports, Bernstein analysis

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EXHIBIT 25: Retail store count across consumption baskets

FY21 FY22 FY23
Grocery 1,596 2,596 3,500
Reliance Digital 450 500 550
Connectivity 8,150 8,200 8,450
Fashion and Lifestyle 2,900 3,900 5,540
Total 12,711 15,196 18,040

Source: Company reports, Bernstein estimates and analysis

II. DIGITAL COMMERCE

India eCommerce is a $133 Bn opportunity, and is driven by increasing digital penetration and the rise in the number of internet
users in India. Digital Commerce accelerated across all categories with daily orders up 17% in Q4FY23. Retail has been scaling
its eCommerce through JioMart and AJIO. Other core platforms include Reliancedigital.in. In Q4FY23, Ajio customer base was
up 33 % YoY, while JioMart reported its highest quarter ever, driven by improvements across metrics. Milkbasket was up 25%
YoY and continues its growth trajectory, with availability across 24 cities. JioMart is focussed on catalogue expansion to drive
contribution from non-grocery categories, with option count up by 34% QoQ and seller base expanding by 56% QoQ.

EXHIBIT 26: Digital + New Commerce stable at ~17-18% of retail revenues

For the exclusive use of [email protected].

4%
10%
20% 20% 19% 19% 18% 18% 17%

Q1FY21 Q4FY21 Q1FY22 Q2FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23

Non-Digital Digital + New Commerce

Source: Company reports, Bernstein analysis

(1) JIOMART (Grocery) - JioMart had ~4.8 Mn downloads last quarter. The app connects both kirana/neighborhood stores
and consumers. It offers deliveries and options to buy more than 50,000 grocery products online. Grocery is a key category in
Retail (~75% India retail), wherein online grocery still has room to grow. Other eCommerce players have not been able to gain
momentum in the segment, due to the complexity of the supply chain and logistics. Through JioMart, RIL has a strong positioning
in grocery, which is aided by New Commerce and its deep offline presence. However, RIL Retail has also tried to grow its non-
grocery revenues, by augmenting its category mix. It added Trends, Hamleys and Urban Ladder to the platform to improve non-
grocery contribution, and has recently been positioning JioMart as a cross-category horizontal platform. JioMart+MilkBasket
delivered its highest ever quarter in Q4FY23, with improvements across all key metrics. Option count was up 34% QoQ, while
seller base expanded by 56% QoQ.

MilkBasket is a subscription based D2C platform, which caters to household grocery needs in F&V, dairy and bakery. It was
acquired by RIL Retail in FY22, for ~$40 Mn as per press reports. It has continued its growth, growing 25% YoY in Q4FY22 and
expanding to 24 cities.

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EXHIBIT 27: JioMart has a higher share of MAUs EXHIBIT 28: JioMart leads in LTM downloads

13% 15% 14% 12% 12% 14% 17% 13% 13% 12% 12% 13% 14% 14%

25% 25% 25% 23% 23% 24% 25% 26%

28% 29% 27% 28% 29%
32%

62% 63% 63% 59% 64% 64% 64% 63% 61% 59%
56% 57% 57%
51%

4/2022 6/2022 8/2022 10/2022 12/2022 2/2023 4/2023 4/2022 6/2022 8/2022 10/2022 12/2022 2/2023 4/2023

JioMart BigBasket Dmart Ready JioMart BigBasket Dmart Ready

For the exclusive use of [email protected].

Source: Apptopia, Bernstein analysis Source: Apptopia, Bernstein analysis

(2) AJIO (Fashion and Lifestyle) - AJIO has a strong presence in online fashion and leads in terms of MAU and downloads. In
Q4FY23, Ajio customer base was up 33 % YoY, while its catalog crossed ~1.3 Mn. Fashion has become the largest category
with ~25% GMV share and grew 40%+ in 2022 while Mobile category grew 7% in 2022. India added 40 Mn+ online shoppers
in CY22 (~16 Mn added from Fashion). Grocery category got a strong Covid tailwind, with Quick commerce key driver for
growth.

EXHIBIT 29: Ajio MAUs have grown fastest amongst its EXHIBIT 30: AJIO leads in LTM downloads
peers
100%
180% 11% 11% 12% 13% 12% 10%
90%
156%
160%
80%
140%
115% 70% 39%
43% 43% 40% 39% 40%
120%
60%
100% 88%
50%
80%
40%
60%
30%
40% 51%
46% 46% 48% 48% 48%
20%
20%
10%
0%
0%
6/2022 8/2022 10/2022 12/2022 2/2023 4/2023

AJIO Myntra Nykaa Fashion AJIO Myntra Nykaa Fashion

Source: Apptopia, Bernstein analysis Source: Apptopia, Bernstein analysis

Reliance is the ONLY player that can have an Inventory-led model

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Both Amazon and Walmart (Flipkart) operate a marketplace model (3P) with third-party sellers selling on the platform. Local
offline retailers (Reliance Retail) have an inventory led model (1P) for their eCommerce initiatives and have an option to sell their
own inventory directly to end customers. In the 1P model, the company has inventory control driving better pricing, customer
experience and stronger control of logistics. Marketplaces can't own inventory and act as a platform for third party sellers (3P
model), reducing flexibility and customer experience. Global marketplaces like Amazon run a marketplace structure in India
charging commission on their platform (Amazon Seller Services). The key regulatory changes in the eCommerce model over the
last few years.

• Controlling stakes in sellers: Marketplaces cannot have controlling stake in sellers on their platform. Amazon and Flipkart
have reduced their stakes in their largest sellers. Amazon had controlling stake in Cloudtail and Appario but has reduced it
from 51% to 24%. Flipkart reduced stake in its seller WS Retail.

• Single seller concentration: A single seller cannot have more than 25% share on a foreign-owned online marketplace.

• Exclusive deals, deep discounts, quality reviews: No eCommerce marketplace platform can mandate a seller/brand to sell
exclusively on the platform. It has also clamped down on deep discounts.

EXHIBIT 31: India E-Commerce - Inventory vs Marketplace model

Key metrics Inventory led Model Marketplace led Model

Mainly metros and T1; medium to high Driven by T2+ cities; low to medium
For the exclusive use of [email protected].

Target markets
income users income users
Average Order Value ~$20 & higher Between $5-10
Largely branded, electronics big share of Mostly unbranded, fashion & general
Assortment Mix
GMV merchandise majority share of GMV
Convenience over affordability, Affordability over convenience,
Business Model
commission led monetization monetization led by VAS and ads
Warehousing, rotation, liquidation, returns No resource allocation for inventory
Inventory Management
management management
Asset heavy in-house logistics, reliant on
Logistics Asset light and 3PL led, economies of scale
capacity utilization
Conducive for big vendors, captive arms, Truly inclusive, size-agnostic seller base,
Seller profile
high operational costs low-cost channels
1P model by foreign owned entities
Regulations Fully compliant - Pure marketplace model
restricted by Indian regulations

Source: Company reports, Bernstein estimate & analysis

III. NEW COMMERCE - TAPPING INTO THE HUGE UNORGANIZED RETAIL SEGMENT
India's retail market is dominated by unorganized trade with ~25 Mn+ small merchants. The digitization of these merchants can
provide a network for consumer brands and advertisers. JioMart Kirana ramped up operations by commencing 21 Smart Hubs
and 34 Staples hubs and is focused on merchant onboarding by adding region specific assortment. New Commerce currently
has ~3 Mn+ merchant partners.

Focus on Kirana stores - Given the large Kirana/unorganized retail opportunity in India, Reliance Retail is aggressively using
both traditional and eB2B models to capture kirana stores. Over 2/3 of its network stores are in Tier 2/3 cities. 75% of store
launches were in Tier 2 and below towns. Reliance is looking to generate stickiness in these geographies.

Grocery also has the highest mix of unorganized merchants. With ~15 Mn+ merchants, on-boarding them into the RIL
ecosystem would provide unparalleled opportunities for digital advertising and eCommerce. RIL is targeting the largest cohort
of kirana stores - small stores that earn <INR 15k/day in revenues, that comprise ~60-80% of kirana stores.

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EXHIBIT 32: Number of merchants (Mn) in unorganized EXHIBIT 33: ~63-77% stores are small stores with <INR
retail 15k daily revenue

15.3
3% 2% 1%

22%
30%
34%

7.7
37%
33%
30%
~77%
2.5 ~63%
1.5
0.6 0.9
35% 40%
33%

Metro Tier 1 Tier 2+

Store revenue (<INR 6k) Store revenue (>INR 6-15k)

For the exclusive use of [email protected].

Store revenue (INR 15-25k) Store revenue (>INR 25k)

Source: Redseer, Bernstein analysis

Source: Redseer, Bernstein analysis

Reliance targeting B2B market - RIL has been strengthening its B2B supply network by investing in supply chain capabilities
and expanding its warehousing network. Warehousing and fulfillment footprint has nearly doubled to ~46.6 Mn Sq. Ft. as of
Q4Fy23. It recently acquired a 100% stake in Metro Cash & Carry, a wholesale distributor that was launched in India in 2003.
Metro currently has 31 wholesale distribution centers across the country. This acquisition gives RIL Retail access to Metro's
warehousing assets in Tier 1 and Tier 2 cities and to its strong supplier network. Metro has distribution centers in Metro/Tier 1
cities like Bangalore (6), Hyderabad (4), Mumbai (2), Delhi (1), and Kolkata (1). It also has centers in Tier 2+ cities like Lucknow,
Meerut, Nasik, Ahmedabad. Metro stores also have a large base of organized retail customers like merchants as well as hotels,
restaurants, and caterers.

EXHIBIT 34: Warehousing and fulfilment space up nearly ~35% QoQ in Q4FY23

50.0
45.6
45.0

40.0

35.0 33.6
31.4
30.0
26.0
25.0 22.7

20.0 17.2

15.0

10.0

5.0

-
3QF22 4QF22 1QF23 2QF23 3QF23 4QF23

Source: Company reports, Bernstein analysis

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IV. RELIANCE BRANDS - BUILDING A STRONG PORTFOLIO OF BRANDS

RIL Retail is developing a strong portfolio of brands, that it can market and distribute through its own ecosystem. Typical
brands are 20-30% lower than peers in most categories. Its brand portfolio adds to the selection available to customers. It has
brands across categories like Grocery, Fashion & Lifestyle and Consumer electronics. It keeps adding growth opportunities by
expanding its portfolio. It forayed into the FMCG and BPC businesses.

Private labels - Retail has largely been executing a private label strategy in low engagement product categories, that are less
impacted by branding - which are categories like home care, hygiene, cleaning, and staples. Retailers use private labels to fill
in gaps in product spaces by launching their own private labels at lower prices, and as a means of boosting sales. However,
Reliance has some private labels in the apparel segment that it sells through AJIO, and includes some top-selling brands such as
Avaasa, and DNMX.

EXHIBIT 35: Reliance Retail FMCG private labels

Category Reliance private label Products Traditional brands
Snacks/instant Snactac Noodles Maggi, Top Ramen, Yippee
Namkeen Haldirams
Biscuits Brittania, Sunfeast, Parle-G
Ketchup Maggi ketchup, Heinz, Kissan
For the exclusive use of [email protected].

Soups Knorr, Chings

Staples Goodlife Rice Daawat, India Gate, Fortune, Koohinoor
Pulses Tata Sampann, Natures, Sarvagunn
Oil Fortune, Saffola,

Flour Aashirvaad, Pilsbury, Annapurna, Fortune

Beverages Yeah! Juice Real, MinuteMaid, Tropicana
Carbonated drinks Coke, Pepsi
Kitchen Desi Kitchen Instant mixes MTR, Aashirvad, Saffola
Pickles Mothers, Priya
Coffee Kaffe Kaffe Nescafe, Bru, Continental
Tea Aarambh Aarambh Tata Tea, Waagh Bakri, Red Label, Taj Mahal
Hygiene Puric Handwash Dettol, Savlon, Lifebuoy, Himalaya
Sanitizer Dettol, Savlon, Lifebuoy, Himalaya
Shower gel Nivea, Palmolive, Lux, Dove
Cleaning/Home products My Home Enzo Toilet cleaner Harpic, Domex, SaniFresh
Mopz floor cleaner Domex, Lizol, Presto
SUDZ laundry detergent Tide, Surf Excel, Ariel
Scrubz utensil cleaner Vim, Presto, Pril
Oral care Calcident Toothpaste Colgate, Pepsodent, CloseUp, Meswak
Beauty and Personal Care Get Real Soap Lux, Dove, LifeBuoy, Dettol, Santoor
Face Wash Garnier, Lakme, Nivea, Himalaya
Talcum Powder Nivea, Ponds, Cinthol, Santoor

Source: Press reports, Company reports, Bernstein analysis

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EXHIBIT 36: RIL apparel private labels

Private label Category
Avaasa Womens ethnic wear
DNMX Mens casual wear
Netplay Mens casual wear
Teamspirit Athleisure
Performax Sports wear
First Class Women and children
Fusion Womens ethnic/fusion wear

Partnerships across categories - Reliance has a strong premium brand portfolio which they can exclusively market on their
platform. Indian affluent consumers are increasingly focusing on premium brands that improve their lifestyle choices. This has
resulted in premium becoming the fastest growing category. Reliance Brands has partnered with several brands at the top
end. It includes luxury brands like Giorgio Armani, Emporio Armani, Burberry as well as affordable luxury brands like Hugo Boss,
Canali and Paul Smith. Reliance Retail has a wide portfolio and continues leadership in the segment, with its revenues up 35%
YoY.

EXHIBIT 37: International Brand Partners with Reliance Retail (non Exhaustive)
For the exclusive use of [email protected].

Category Brand
Giorgio Armani, Emporio Armani, Bally, Burberry,
Jimmy Choo, Ermengildo Zegna, Salvatore
Luxury
Ferragamo, Paul & Shark, Tiffany & Co., Bottega
Veneta
Hugo Boss, Canali, Paul Smith, Satya Paul, West Elm,
Affordable Luxury Brooks Brothers, Kate Spade, Coash, Michael Kors,
Diesel, Tumi
Pottery Barn, Replay, SuperDry, Dune London,
Premium
WOMO, Bullfrog, Gas, Muji, Hunkemoller
Tally Weijl, Mothercare, Iconix, Marks & Spencers,
Mainstream
Hamleys, DC Shoes
Value Payless, Apex, Flormar

Strong investor/partner network: Reliance Retail has raised US$6Bn+ since 9 September, by diluting 10.1% stake. Jio
Platforms raised US$20Bn from investors by diluting ~33% stake. Most of the investors in Reliance Retail (except GIC) had also
invested in Jio Platforms.

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EXHIBIT 38: Investments in Jio Platforms and Reliance Retail

Jio Platforms Reliance Retail
Investment Investment
Investor Type % stake % stake
(US$ Bn) (US$ Bn)
Facebook Strategic 5.7 9.99%
Google Strategic 4.5 7.73%
Vista Equity Partners Financial 1.5 2.32%
KKR Financial 1.5 2.32% 0.75 1.19%
PIF Financial 1.5 2.32% 1.3 2.04%
Silver Lake Financial 1.35 2.08% 1.25 2.00%
Mubadala Financial 1.2 1.85% 0.83 1.33%
General Atlantic Financial 0.87 1.34% 0.5 0.78%
ADIA Financial 0.75 1.16% 0.75 1.18%
TPG Financial 0.6 0.93% 0.25 0.39%
L Catterton Financial 0.25 0.39%
Intel Financial 0.25 0.39%
Qualcomm Financial 0.1 0.15%
GIC Financial 0.75 1.18%
Total 20.00 33.0% 6.38 10.1%
For the exclusive use of [email protected].

Source: Company reports, Bernstein analysis

B. FLIPKART (PRIVATE, ~80% OWNED BY WALMART)

Founded in 2007, Flipkart, owned by Walmart (covered by Dean Rosenblum) was the first mover in E-Commerce in India. Flipkart's
GMV grew rapidly and at a current run rate of $23 Bn. FY21 revenue was at $6.2 Bn. The latest round valuation is $37.6 Bn.
Flipkart contribution margin is (-0.4%) with total capital consumption of $9-10 Bn. The company has recently introduced product
performance ads, made additional investments in Myntra to scale up Beauty category.

Challenges for Flipkart

• High concentration of mobile phones – The wireless/mobile category contributes to ~50% of ecommerce sales in India,
driven by high ATV (average transaction value) and sets the tone for overall leadership, making it highly competitive. However,
margins are razor thin (negative in some cases) due to fragmented/competitive nature of the market. Post the acquisition,
Flipkart has had greater emphasis on grocery (strength of Walmart). Flipkart owns standalone fashion portals Myntra and
Jabong. (60% share).

• Path to profitability not easy – Ecommerce take rates /margins vary across categories. Mobile phone is a low margin
category (6-7%). Take rates are high for apparels (15-20%). Low ASP with high fixed/variable cost structure makes
profitability a challenge. Flipkart will need to increase mix of high margin categories (apparel, private labels), create
leadership in new categories like eGrocery and improve margins in mobile phones/wireless categories.

• Regulatory scrutiny to be high- As per FDI regulations, eCommerce companies (with foreign investments) are not allowed
to own, sell, and price goods (1P model). Recent regulations disallow exclusives/ discounts on the marketplace, single seller
concentration (<25%) and equity stakes in sellers. We expect the regulator and investor scrutiny continue to stay high and
impact operating models/ growth of foreign eCommerce companies.

• Scale of the business: Flipkart GMV reached $15 Bn in FY21 & currently at a run rate of $23 Bn. Mobile and apparel to
be the largest categories for Flipkart with ~50% and 30% mix. Flipkart is estimated to hold 48% and 60% market share in
online smartphone and online fashion market respectively.

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EXHIBIT 39: Flipkart Operating Revenue (INR Bn.) EXHIBIT 40: EBITDA (INR Bn.) & EBITDA Margin (%)

500 45% - 0%

450 429 40% -5

43% -2%
400 35% -10
342 -4%
350
306 30% -15
-6%
300
25% -20
-6.5%
250 26% -8%
214 (22)
20% -25
200
-10%
15% -30 (28)
150 -10.3% -10.2%
-12%
100 10% -35
12%
(35)
5% -40 -14%
50 -13.4%
(41)
- 0% -45 -16%
FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21

Total Revenue (INR Bn.) YoY Growth EBITDA (INR Bn.) EBITDA Margin
For the exclusive use of [email protected].

Source: Company filings, Bernstein Analysis Source: Company filings, Bernstein Analysis

C. AMAZON INDIA (100% OWNED BY AMAZON INC)

Amazon (covered by Mark Shmulik) India operates a marketplace E-Commerce model in India. Amazon India had a GMV of ~
$18-20 Bn. The mix percentage is higher for smartphones with ~40%+ of GMV. Smartphones have been the fastest growing but
lower margin category for Amazon. Amazon is estimated to have a leading ~45% share in the category driven by strong brand
relationships.

Challenges for Amazon

• Cloud a bigger focus: Amazon is shifting focus from eCommerce to Cloud in India (post Andy Jassy becoming CEO) with a
$12.7 Bn investment in AWS (Link). The latest investment comes on top of $3.7 bn AWS committed to the country between
2016 and 2022. Amazon invested ~$ 6.5 Bn in its eCommerce business. In terms of profitability, Amazon's AWS operations
in India are just break even, whereas the ecommerce unit, Amazon Seller Services, reported losses of $400 -500 Mn in the
year ended March 2022.

• Losing share in high margin categories: Amazon has lost share in profitable categories like Fashion. In fashion, Flipkart
(including Myntra) is the dominant player with ~60% share while Amazon has ~20% share. AJio (part of Reliance Retail) is
growing strongly with a ~15+%+ share.

• Still unprofitable: Amazon India is estimated with GMV of $ 18-20 Bn. However, the business remains unprofitable.
Amazon India EBITDA margin remains negative at -2.0 to -2.5% with total capital investment of $ 6-6.5 Bn.

• Marketplace model (Regulations impact on the operating model): Amazon runs its marketplace model and recently
closed largest seller Cloudtail (~25% of GMV) as per regulatory requirements. Cloud tail managed of inventory to multiple
seller firms which as per regulations brings dependency down to less than 25%. Amazon has broken down the seller
ecosystem into smaller sellers (Exhibit 43).

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EXHIBIT 41: Amazon stepped up investment in cloud in EXHIBIT 42: Profitabillity for Amazon India ($ Mn)
India ($ bn)

12.7 -0.5 to -1.0

6.5

-400 to -500
Cloud Ecommerce
For the exclusive use of [email protected].

Profitability in India ($ Mn)

Investment in Cloud Investment in Ecommerce
Source: Press reports, Bernstein analysis
Investment in cloud in addition to the $3.7 bn invested between 2016 and 2022.
Source: Company reports, Press reports, Bernstein analysis

EXHIBIT 43: Marketplace model - New sellers post the closure of Cloudtail

Seller Firms Product Type Major Investors

Cocoblu Fashion and apparel RattanIndia Enterprises

Rocket Kommerce Health and personal care RK Group

RPG Industrial Product Pvt Ltd
VRP Telematics Electronics
RPG Nirman PVT LTd
DawnTech Electronics Electronics Salarpuria-Sattva Group

Clicktech Electronics Vinid Poddar Group

RetailEZ Home, kitchen and sports Rupa Promoters Group

Source: News reports, Bernstein analysis

D. MEESHO (PRIVATE, FOCUSED ON TIER 2/3 GEOS)

Meesho (investors incl. Softbank, Prosus) empowers small sellers by making E-Commerce inclusive. The company differentiates
by providing access to unbranded products at low prices to SMEs. ~80% of the sellers are retail business owners and~95% of
the selection on the platform is unbranded. Meesho is the fastest growing E-Commerce platform in India with ~120 Mn average
MAUs. Current GMV run rate of the business is $5 Bn GMV with ~50% GMV from apparel/Fashion, BPC is ~8-10% and Home
& Kitchen is ~8-10%.

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EXHIBIT 44: Meesho GMV ($ mn) EXHIBIT 45: Annualized Operating Revenue ($ mn)

2,335 1,302
2,215 1,244

318
499

CY20 CY21 1H CY22 CY20 CY21 1H CY22

For the exclusive use of [email protected].

GMV ($ mn) Annualized Operating Revenue ($ mn)

Source: Company reports, Bernstein estimate & analysis Source: Company reports, Bernstein estimate & analysis

EXHIBIT 46: Meesho - Total Orders EXHIBIT 47: Meesho - Transacting EXHIBIT 48: Product category mix (%)
(mn) Users (mn)
8%
7%
448 8%
436 61.0 9%

52.0 22%

10%

36%

FY22
81
Womens's Apparel Men's Apparel
Footwear & Accessories Home & Kitchen
5.3 BPC Kids and Baby Care
CY20 CY21 1H CY22 Other

Total Orders (mn) CY20 CY21 1H CY22

Source: Company reports, Bernstein analysis

Source: Company reports, Bernstein estimate & Source: Company reports, Bernstein analysis
analysis

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5. COMPANY VALUATION
• We revise our target price and update our model for Reliance Industries; We roll over to FY25.

• We value Retail based on Offline retail, Non-core retail (Connectivity) and New Commerce/eCommerce. Given the rapid
growth in Offline retail (incl Grocery, Apparel and Electronics) and the operational leverage built into the business, we
value Offline retail at 30x FY25 EV/EBITDA. We value Non-Core retail on a 9x FY25 Ev/EBITDA multiple. We value New
Commerce/ eCommerce, which should benefit from the distribution and scale built in reliance at 5x FY25 EV/Sales multiple.

• We value the refinery and petrochemical segments on 8.0x and 7.8x FY25 EV/EBITDA, respectively, based on comparable
peer multiples. For upstream, we use the NAV method to value Reliance's E&P portfolio assuming a long term US$75 oil
price.

• For Digital Services, we value Jio (Telecom Services and Broadband) at US$83 bn gross or US$55 bn net to Reliance. We
value it at 9.5 x FY25 EV/EBITDA multiple (premium to Bharti Telecom at 9.0x). For Telecom option value, we value using EV/
sales.

• For the New Energy business, we used comparable 2025 EV/sales multiples for each segment. For the electrolyzer business
we use 2.5x EV/sales, fuel cell at 1.4x, batteries at 1.4x and solar at 2.0x.

EXHIBIT 49: We value Reliance at INR 3,030 based on our SOTP valuation
For the exclusive use of [email protected].

RIL SOTP Valuation

Segment Metric INR bn Multiple USD mln INR bn INR/share
Oil to Chemicals - O2C 58,276 4,685 700
Refining FY25 EBITDA 192 8.0x 19,131 1,538 230
Petrochemicals FY25 EBITDA 403 7.8x 39,145 3,147 470
Digital Services 67,927 5,461 810
R-Jio FY25 EBITDA 701 9.5x 55,276 4,444 660
Telecom option value FY25 Sales 170 9.0x 12,651 1,017 150
Retail 110,982 8,922 1,340
Core FY25 EBITDA 225 30.0x 72,613 5,837 870
Non-core FY25 EBITDA 20 9.0x 1,878 151 30
eCommerce FY25 Sales 690 5.0x 36,492 2,934 440
New Energy FY26 Sales 854 1.7x 17,719 1,424 211
Upstream Oil & Gas FY25 EBITDA 157 3.0x 5,843 470 69
Investments and Others 2,975 239 35
Net Debt (Cash) 11,356 913 135
Total Value 3,030
Current Share Price (23 May, 2023) 2,455
% Potential Upside 23%

Valuation method - For refining, petrochemical, and core and non-core retail, we value these segments based on EV/EBITDA of comparable peers. For Reliance Jio,
we value the segment at a net value of US$88bn to RIL based on DCF. For Telecom option value, we value using on EV/sales. For upstream, we value the segment
using a risked NAV at US$75 Brent. For New Energy, we value the segment based on EV/sales for comparable peers. RIL holds 66.5% stake in Reliance Jio and 85%
stake in Reliance Retail.

REVISION IN ESTIMATES — RELIANCE RETAIL

We make the following updates to our Reliance Retail model:

• We expect gross revenues to grow at 17% CAGR to INR 4,136 Bn by FY26, driven by stronger growth of ~24% CAGR across
core verticals, led by store expansion of 3k+ stores over FY23-26. We see spends per store increasing due to structural shift
from unorganized retail to organized retail chains.

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• We model core and non-core segment EBITDA Margin (on gross turnover) to remain stable at 11-11.5% with a slight upside
from increased operational efficiencies and scale and 1.6% respectively over the forecasted period.

• Non-core revenues are expected to grow much slower at 6% CAGR over FY23-26. We see sales per store in connectivity
moderating, due to store expansion.

We adjust the valuation for RIL's 85% stake. We estimate enterprise value of $111 Bn valuation for RIL's 85% stake.

EXHIBIT 50: Reliance Retail estimate summary

FY21 FY22 FY23 FY24E FY25E FY26E

Revenue (INR Bn)

Offline Retail 643 655 985 1,234 1,564 1,929
New Commerce/eCommerce 115 382 468 561 690 837
Core Retail 758 1,037 1,453 1,795 2,254 2,766
Non-Core Retail 818 960 1,151 1,247 1,316 1,370
Total Retail 1,576 1,997 2,604 3,043 3,570 4,136
Growth (%) 27% 30% 17% 17% 16%

EBITDA Margins (%)

Core Retail 10.0% 10.6% 11.2% 11.0% 11.6% 11.8%
For the exclusive use of [email protected].

Non-Core Retail 2.7% 1.4% 1.5% 1.5% 1.5% 1.6%

Total Retail 6.2% 6.2% 6.9% 7.1% 7.9% 8.4%

Offline Retail Stores 4,946 6,996 9,440 10,488 11,328 11,920

Non-Core Stores (Connectivity) 8,150 8,200 8,600 8,875 9,095 9,215
Total Retail Stores 13,096 15,196 18,040 19,363 20,423 21,135

Capex (INR Bn) 103 300 391 365 357 290

% of revenue 7% 15% 15% 12% 10% 7%

Source: Company reports, Bernstein estimates and analysis

REVISION IN ESTIMATES — RELIANCE JIO

We make the following updates to our Reliance Jio model:

• We have revised our estimates for subscriber adds and ARPU to reflect the trends seen in recent quarters. We expect the
subscriber base to grow at 5% CAGR over FY23-26, to reach ~410 Mn by FY26. We expect its subscriber market share to
remain for Jio to increase, as VodafoneIdea customers churn out.

• We expect ARPU to improve to INR 185 by FY24, and ~INR 560 by FY30, driven by higher data demand, 5G upgrades, better
user mix and potential tariff hikes. We do not see any tariff hikes in the near term, but expect them to come in FY25.

• We model broadband subscriber base to grow faster at 15% CAGR between FY23-26, driven by an agressive push towards
gaining mode home passes and a revamped offering incorporating 5G. We also see demand for high speed internet
increasing due to availability of fiber connections across tier-2/tier-3 Indian cities and increasing applications of internet.

• We expect ARPU growth to help expand EBITDA margins expand to 54% by FY25, to 54.6% by FY26. We see EBITDA
upside slightly mitigated by increasing opex for 5G.

Based on these updates our calculated Enterprise value for Jio net to RIL is INR 5,461 Bn (~$68 Bn). We have adjusted it for a
stake of 66.5% for RIL‘s share.

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EXHIBIT 51: Reliance Jio estimate summary

FY21 FY22 FY23 FY24E FY25E FY26E

Revenue (INR Bn)

Wireless Mobile Service 699 770 908 1,018 1,214 1,394
Broadband (FTTH) 14 31 41 51 83 109
Net Service Revenue 713 801 948 1,070 1,297 1,503
Revenue Growth (%) 12.3% 18.5% 12.8% 21.2% 15.9%

EBITDA (INR Bn) 323 407 507 560 701 821

EBITDA Margin (%) 45.3% 50.8% 53.5% 52.3% 54.0% 54.6%

Subscriber Base (Mn.)

Wireless Mobile Service 426.2 410.2 439.3 476.4 493.8 510.1
Broadband (FTTH) 22.8 27.3 27.8 33.8 38.8 42.8

ARPU (INR/Month)
Wireless Mobile Service 143 153 178 185 209 231
For the exclusive use of [email protected].

Broadband (FTTH) 685 650 620 589 577 571

Source: Company reports, Bernstein estimates and analysis

EXHIBIT 52: Retail Comps Table

FY24/ CY23 Cons. Cons.

Market Cap FY22-25E 12m Fwd 24m Fwd FY24 ROE
Company CCY Price EBITDA 12m Fwd 24m Fwd P/B Ratio
($ Mn) Sales CAGR P/S Ratio P/S Ratio (%)
Margin EV/EBITDA EV/EBITDA

India Retail Comps

Reliance Industries 200,410 INR 2,455 13% 17.2% 11.5x 10.3x 2.0x 1.7x 1.6x 8.6%
Dmart 26,911 INR 3,433 27% 8.7% 46.6x 37.6x 13.9x 4.2x 3.5x 16.9%
Vmart 488 INR 2,045 34% 13.4% 12.4x 10.8x 4.8x 1.3x 1.0x 8.7%
Trent 6,450 INR 1,504 41% 13.1% 40.6x 32.0x 20.6x 5.2x 4.3x 20.9%
Aditya Birla Fashions 2,227 INR 195 27% 16.3% 12.1x 10.0x 5.5x 1.3x 1.1x 6.2%
Average 28% 24.6x 20.1x 9.4x 2.7x 2.3x 12.2%

Global Retail Comps

Alibaba 214,452 USD 83 7% 19.5% 5.4x 4.9x 1.5x 1.6x 1.5x 11.5%
Pinduoduo 78,303 USD 62 29% 22.7% 9.7x 7.5x 19.6x 3.3x 2.8x 24.9%
Amazon 1,179,838 USD 115 10% 15.8% 12.7x 10.8x 7.6x 2.1x 1.9x 12.1%
Sea Group 36,477 USD 64 16% 13.0% 16.8x 12.4x 5.5x 2.7x 2.4x 14.9%
Ebay 23,401 USD 44 (0%) 31.8% 7.5x 7.5x 4.4x 2.3x 2.2x 41.1%
Average 18% 10.4x 7.6x 10.6x 2.4x 2.1x 18.2%

Market Data as of June 28, 2022

Source: Bloomberg, Bernstein Analysis

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EXHIBIT 53: Telecom Comps Table

FY24 FY25
Cons. 12m 24m 24m Forward
Market Cap FY22-25E Cons. Forward Forward 12m Forward
Company Price 24m Fwd Forward Forward EV/EBITDA
(US$mn) Sales CAGR 12m Fwd P/E EV/Sales EV/Sales EV/EBITDA Ratio
P/E P/S Ratio P/S Ratio Ratio
Ratio Ratio
Global Telecom Comps
Vodafone Idea 4,083 7 6% NA NA 0.7x 0.7x 6.7x 6.2x 12.3x 11.1x
Singtel 31,117 3 2% 16.1x 14.0x 2.8x 2.7x 3.2x 3.1x 12.6x 12.1x
Bharti 55,792 800 15% 28.5x 19.8x 2.9x 2.6x 4.5x 4.0x 7.7x 6.5x
Softbank Group 54,923 5,180 2% 23.8x 25.2x 1.1x 1.1x 3.2x 3.1x 11.7x 11.8x
AIS 18,316 213 3% 21.3x 19.3x 3.2x 3.1x 3.6x 3.5x 8.0x 7.4x
BCE 42,471 63 1% 19.2x 18.2x 2.3x 2.3x 3.7x 3.6x 8.9x 8.7x
Globe 4,446 1,718 3% 12.8x 11.3x 1.4x 1.3x 2.9x 2.7x 5.7x 5.5x
Telenor 15,024 118 1% 13.9x 14.6x 1.9x 1.9x 2.9x 2.9x 7.0x 7.0x
Telefonica 24,729 4 1% 12.0x 11.1x 0.6x 0.6x 1.6x 1.6x 4.7x 4.6x
Deutsche Telekom 117,445 22 1% 12.4x 11.1x 1.0x 0.9x 2.4x 2.3x 6.5x 6.1x
Telstra 33,243 4 2% 23.7x 21.8x 2.2x 2.1x 2.8x 2.8x 7.8x 7.5x
Vodafone 28,180 84 1% 10.8x 10.0x 0.6x 0.6x 1.7x 1.7x 4.6x 4.5x
BT 18,313 149 0% 7.9x 7.7x 0.7x 0.7x 1.7x 1.7x 3.9x 3.9x
KDDI 73,828 4,445 2% 13.3x 12.5x 1.8x 1.7x 1.9x 1.9x 6.0x 5.8x
MTN 11,264 11,479 5% 8.1x 7.2x 1.0x 0.9x 1.2x 1.1x 2.7x 2.4x
Verizon 152,353 36 1% 7.8x 7.7x 1.1x 1.1x 2.4x 2.4x 6.2x 6.0x
China Telecom 70,000 4 5% 10.4x 9.3x 0.9x 0.9x 0.9x 0.8x 3.2x 3.0x
China Mobile 183,994 66 5% 9.0x 8.3x 1.3x 1.2x 0.9x 0.9x 3.0x 2.8x
AT&T 115,099 16 1% 6.6x 6.4x 0.9x 0.9x 2.3x 2.3x 5.8x 5.5x
China Unicom 23,586 6 4% 9.4x 7.9x 0.4x 0.4x 0.3x 0.3x 1.1x 0.9x
Average 14.1x 12.8x 1.4x 1.4x 2.5x 2.4x 6.5x 6.2x
Median 12.4x 11.1x 1.1x 1.1x 2.4x 2.4x 6.1x 5.9x
For the exclusive use of [email protected].

As of 23 May 2023
Source: Bloomberg, Company reports, Bernstein analysis

6. RELIANCE E-COMMERCE APPS & RETAIL STORES

Below are screenshots of eCommerce apps (Ajio, JioMart) and pictures of offline stores (Reliance Smart, Reliance Digital,
Reliance Trends, Tira-BPC).

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EXHIBIT 54: AJIO app EXHIBIT 55: JioMart App

For the exclusive use of [email protected].

Source: AJIO, Bernstein analysis

Source: Jiomart app, Bernstein analysis

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EXHIBIT 56: Reliance Digital EXHIBIT 57: Reliance SMART

Source: Bernstein analysis

For the exclusive use of [email protected].

Source: Bernstein photos

EXHIBIT 58: Reliance Trends EXHIBIT 59: Tira - the luxury BPC store

Source: Press reports, Bernstein analysis

Source: Bernstein photos

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APPENDIX - FINANCIAL FORECASTS

EXHIBIT 60: Reliance Industries - Financial Exhibit

Reliance Industries FY2019 FY2020 FY2021 FY2022 FY2023 FY2024E FY2025E FY2026E
(INR Billions) 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 31-Mar-23 31-Mar-24 31-Mar-25 31-Mar-26
RIL Results
Turnover 5,671.4 6,020.7 4,839.2 7,216.3 8,929.4 10,270.2 11,651.1 12,858.6
EBITDA 816.1 852.3 890.3 1191.2 1503.5 1623.1 1926.0 2250.6
PBDIT 871.1 938.7 974.2 1256.9 1546.9 1658.4 1955.4 2283.0
Profit before Tax 496.8 453.4 554.6 841.4 948.0 1145.4 1383.0 1668.1
Taxes (153.9) (137.3) (17.2) (163.0) (207.1) (274.9) (331.9) (400.3)
Net Profit 340.4 355.4 491.3 607.0 667.0 870.5 1051.1 1267.8
EPS (INR/share) 57.44 70.66 75.21 90.85 98.59 128.68 155.37 187.40

Petrochemicals
Revenue 1,687.0 1,409.0 1,240.7 1,952.0 2,410.1 2,440.9 2,582.9 2,575.3
EBIT 315.3 252.6 213.1 294.8 321.0 320.1 342.4 336.1
EBIT Margin 18.7% 17.9% 17.2% 15.1% 13.3% 13.1% 13.3% 13.1%

Refining and Marketing

Revenue 3,205.5 2,990.8 2,085.2 3,777.4 4,633.4 4,567.3 4,744.7 4,538.2
EBIT 193.5 206.5 71.2 161.2 148.6 173.3 132.5 159.2
EBIT Margin 6.0% 6.9% 3.4% 4.3% 3.2% 3.8% 2.8% 3.5%
For the exclusive use of [email protected].

Oil and Gas

Revenue 26.1 21.7 2.6 63.3 164.6 208.8 215.0 230.7
EBIT (2.2) 2.5 (0.6) 24.6 109.0 121.9 125.9 136.0
EBIT Margin -8.3% 11.5% -24.5% 38.9% 66.2% 58.4% 58.5% 59.0%

Retail
Revenue 1,305.7 1,629.4 1,538.2 1,997.5 2,604.3 3,042.6 3,569.7 4,136.3
EBIT 0.0 0.0 79.9 102.0 139.9 183.4 242.6 304.0
EBIT Margin 0.0% 0.0% 5.2% 5.1% 5.4% 6.0% 6.8% 7.4%

Digital
Revenue 465.1 684.6 902.9 1,001.6 1,197.9 1,183.8 1,466.6 1,717.9
EBIT 87.8 143.6 225.4 251.5 296.8 385.6 527.7 650.9
EBIT Margin 18.9% 21.0% 25.0% 25.1% 24.8% 32.6% 36.0% 37.9%

BALANCE SHEET FY2019 FY2020 FY2021 FY2022 FY2023 FY2024E FY2025E FY2026E
(INR Billions) 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 31-Mar-23 31-Mar-24 31-Mar-25 31-Mar-26
Total Assets 9679.6 11153.5 12448.8 14220.5 16548.0 17710.4 19004.3 20494.4
Cash & Cash Equivalents 75.1 309.2 785.2 600.7 947.0 1206.1 1707.6 2452.6
Total Liabilities 5747.5 6646.7 4782.5 5460.1 6400.4 6452.1 6853.7 7249.8
Interest Bearing Debt 2719.4 3362.9 2237.6 2663.1 3147.1 3095.8 3372.8 3618.8
Equity 3953.9 4613.5 7994.3 8889.8 9341.6 10161.6 11146.7 12334.7
Key Financial Ratios
Net Debt to Equity 48.9% 50.4% -0.9% 11.0% 9.8% 6.9% 5.2% 1.5%

Cash flow statement FY2019 FY2020 FY2021 FY2022 FY2023 FY2024E FY2025E FY2026E
(INR Billions) 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 31-Mar-23 31-Mar-24 31-Mar-25 31-Mar-26
Net income 340 355 491 607 667 871 1,051 1,268
Depr., Depl. & Amort. 209 222 266 298 403 421 463 455
Change in working capital (251) 819 (507) 7 (196) - - -
Cash flow from operations 457 981 262 1,107 1,150 1,519 1,755 1,986
Capex (936) (765) (1,058) (1,001) (1,410) (1,305) (1,254) (1,180)
Net investments (54) 141 (473) 3 294 - - -
Cash flow from investing (990) (757) (1,416) (1,101) (912) (1,305) (1,254) (1,180)
Debt issued(repaid) 856 331 (847) 77 367 299 277 246
Dividends (43) (46) (39) (43) (51) (51) (66) (80)
Cash flow from financing activities 559 (25) 1,019 173 105 45 1 (61)
Free Cash Flow (479) 216 (797) 105 (260) 214 501 806

Source: Bloomberg, Company reports, Bernstein analysis

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DISCLOSURE APPENDIX

I. REQUIRED DISCLOSURES

Autonomous Research US is a unit within Sanford C. Bernstein & Co., LLC , a broker-dealer registered with the U.S. Securities
and Exchange Commission and a member of the Financial Industry Regulatory Authority (www.finra.org) and the Securities
Investor Protection Corporation (see www.sipc.org). When this report contains an analysis of debt securities, such report is
intended for institutional investors and is not subject to all the independence and disclosure standards applicable to debt
research for retail investors under the FINRA rules.

VALUATION METHODOLOGY

Asia-Pacific Oil & Gas

We value Asian integrated oil companies using a Dividend Discount Model (DDM) and Asian E&P companies using a Discounted
Cash Flow (DCF) Model. Our assumptions for oil price are US$90/bbl in 2023, $96/bbl in 2024, $95/bbl in 2025 and US$75/
bbl in 2026+.

We value Saudi Arabian Oil Company (Saudi Aramco) by applying the Dividend Discount Model (DDM). Our dividend estimates
are based on a long term oil price of US$75/bbl Brent. We assume a terminal growth rate of 1% and discount rate of 8.5% in
our valuation.
For the exclusive use of [email protected].

For RIL, we use a sum of the parts valuation methodology.

We maintain dual A- and H-share ratings when stocks have both categories of shares listed on the relevant exchange.

We derive our A-share target prices by translating the H-share target prices from HKD to RMB. As a general matter, we then
assign our rating for A-share stocks by comparing this translated price to the current A-share price. Thus there will be situations
where the H-share and A-share ratings on a related security may differ from one another.

Reliance Industries Ltd

We value Reliance Industries using a sum of the parts valuation methodology.

RISKS

Asia-Pacific Oil & Gas

Risks to energy and commodity stocks include economic conditions and commodity price swings. If the global, US or Chinese
economies turn down significantly, global demand growth for commodities could decelerate, putting pressure on prices and
thus on the cash flow of producers. Economic swings also affect refiners. Given the importance of retail investors to the A-share
markets, A-share listed stocks may be relatively more volatile than their H-share listed counterparts. Upside or downside risks
could come from Chinese government policies as China looks to control the rate of growth of its economy in general, or capital
markets in particular. These policies may manifest in market rules that affect A- and H- shares differently.

Reliance Industries Ltd

Downside risks to our Reliance price target and estimates include further operational complications at the Dhirubhai field
which result in a significantly lower than expected production output and slower expansion. In telecom, 5G services will require
additional spectrum which could be higher than our current estimates. Downside risks to refining and petrochemical margins
could come from slow economic growth in the region and demand growth remains weak. In retail, slower than expected
footfalls, increase in capital expenditures and higher competition are key downside risks.

RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTION

Bernstein brand

The Bernstein brand rates stocks based on forecasts of relative performance for the next 6-12 months versus the S&P 500
for stocks listed on the U.S. and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large & Mid Cap
Price Return Index (EDM) for stocks listed on the European exchanges (except for Russian companies), versus the Bloomberg

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Emerging Markets Large & Mid Cap Price Return Index (EM) for Russian companies and stocks listed on emerging markets
exchanges outside of the Asia Pacific region, versus the Bloomberg Japan Large & Mid Cap Price Return Index USD (JP) for
stocks listed on the Japanese exchanges, and versus the Bloomberg Asia ex-Japan Large & Mid Cap Price Return Index (ASIAX)
for stocks listed on the Asian (ex-Japan) exchanges -unless otherwise specified.

The Bernstein brand has three categories of ratings:

• Outperform: Stock will outpace the market index by more than 15 pp

• Market-Perform: Stock will perform in line with the market index to within +/-15 pp

• Underperform: Stock will trail the performance of the market index by more than 15 pp

Coverage Suspended applies when coverage of a company under the Bernstein research brand has been suspended. Ratings
and price targets are suspended temporarily. Previously issued ratings and price targets are no longer current and should
therefore not be relied upon.

Not Rated: The stock Rating, Target Price and/or estimates (if any) have been suspended temporarily.

Autonomous brand
The Autonomous brand rates stocks as indicated below. As our benchmarks we use the BEBANKS and EDMFI index for
European banks, the BEINSUR for European insurers, the S&P 500 and S&P Financials for US banks coverage, S5LIFE for US
Insurance, the SPSIINS for US Non-Life Insurers coverage, and IBOV for Brazil and H-FIN index for China banks and insurers.
For the exclusive use of [email protected].

Ratings are stated relative to the sector (not the market).

The Autonomous brand has three categories of ratings:

• Outperform (OP): Stock will outpace the relevant index by more than 10 pp

• Neutral (N): Stock will perform in line with the relevant index to within +/-10 pp

• Underperform (UP): Stock will trail the performance of the relevant index by more than 10 pp

Coverage Suspended (CS) applies when coverage of a company under the Autonomous research brand has been suspended.
Ratings and price targets are suspended temporarily. Previously issued ratings and price targets are no longer current and
should therefore not be relied upon.

Not Rated: The stock Rating, Target Price and/or estimates (if any) have been suspended temporarily.

Those denoted as ‘Feature’ (e.g., Feature Outperform FOP, Feature Under Outperform FUP) are our core ideas. Not Rated (NR)
is applied to companies that are not under formal coverage.

For both brands, recommendations are based on a 12-month time horizon.

DISTRIBUTION OF RATINGS/INVESTMENT BANKING SERVICES

Rating Market Abuse Regulation (MAR) Count Percent Count* Percent*
and FINRA Rule 2241 classification
Outperform BUY 396 50.00% 0 0.00%

Market-Perform (Bernstein Brand)

HOLD 270 34.09% 1 0.37%
Neutral (Autonomous Brand)

Underperform SELL 126 15.91% 0 0.00%

* These figures represent the number and percentage of companies in each category to whom Bernstein and Autonomous
provided investment banking services.
As of May 24 2023. All figures are updated quarterly and represent the cumulative ratings over the previous 12 months.

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 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

PRICE CHARTS/ RATINGS AND PRICE TARGET HISTORY

Reliance Industries Ltd (RIGD.LI) Rating History for Bernstein as of 05/23/2023

O:$56.10 O:$74.10 O:$84.90 O:$100.80 O:$96.30
06/24/2020 09/23/2020 07/15/2021 06/29/2022 07/06/2022
$110
$100
$90
$80
$70
$60
$50
$40
$30
Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23

Closing Price Price Target

Outperform (O); Market-Perform (M); Underperform (U); Not rated (N)

Reliance Industries Ltd (RIL.IN) Rating History for Bernstein as of 05/23/2023

O:INR1,870.00 O:INR2,470.00 O:INR2,830.00 O:INR3,360.00 O:INR3,210.00
06/24/2020 09/23/2020 07/15/2021 06/29/2022 07/06/2022
INR3,500
For the exclusive use of [email protected].

INR3,000

INR2,500

INR2,000

INR1,500

INR1,000
Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23

Closing Price Price Target

Outperform (O); Market-Perform (M); Underperform (U); Not rated (N)

Rahul Malhotra maintains a long position in Reliance Industries Ltd (RIGD.LI and RIL.IN).
OTHER MATTERS

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 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

securities or issuers and that no part of that analyst's compensation was, is, or will be, directly or indirectly, related to the
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Regulation (“MAR”).

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 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

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 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

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 Rahul Malhotra    +65 6230 2344  [email protected] 24 May 2023

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