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Economy

The solar energy sector in India may soon be disrupted by Reliance

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According to Harshvardhan Dole, Vice President, IIFL, Reliance’s push into green energy, notably solar panel production, has far-reaching implications for the entire supply chain. Excerpts from an interview on RIL AGM that have been edited:

At the RIL AGM, a number of significant announcements were made. Let’s discuss about the main points and the new energy initiative.

RIL’s move into green energy is a huge step forward. It will make their income model less risky. It will reduce their dependency on traditional O2C business, allowing them to become more tech-savvy and environmentally conscious. From a macro perspective, this will boost their overall score in the ESG framework.

Second, RIL’s venture into green energy, notably solar panel production, has far-reaching implications for the entire supply chain. India has been importing solar panel-related equipment and putting it together here to make solar modules. This has raised concerns about the long-term viability of numerous companies’ revenue strategies. RIL has now created an integrated value proposition, which has altered the profit pool and industry structure. In that sense, it’s a very disruptive move.

What about the JioPhone Next, which is incredibly cheap? This is going to be Jio’s next big boost.

It appears to be extremely promising. However, it’s important to keep in mind what’s going on in the world. There is a chip scarcity all over the place, putting a strain on the supply chain. We’d wait for further information on pricing and how the plan is packaged before making a decision. At the end of the day, they must gain a significant market share to benefit from Jio.

While the energy sector received a lot of attention this time, what are your primary takeaways from all of Reliance Retail’s key business segments?

I hope there is no third wave after the near-term instability that the retail industry is experiencing as a result of the second wave. I believe the chairman’s revenue projection or trajectory from yesterday implies a CAGR of anywhere between 35 and 45 percent over the next three to five years. That is far more than the estimate we had for Reliance Retail. We’re pleasantly surprised. It would be necessary to split it down into what is coming from JioMart, where scaling up is a lot faster than in the typical offline business model.

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