Moody’s upgrades Reliance Industries rating to Baa1; TCS, Infosys and Tata Steel also see rating actions

Moody’s Ratings has upgraded Reliance Industries Ltd. (RIL) to Baa1 from Baa2, citing the conglomerate’s strong and resilient credit profile, diversified business operations, robust liquidity position and disciplined financial management. The upgrade comes as Moody’s revised its methodology for assessing the impact of sovereign credit quality on corporate ratings, allowing stronger companies to be rated further above their home country’s sovereign rating.

The rating agency said Reliance’s upgrade reflects its leadership across multiple sectors, including oil-to-chemicals, retail and digital services, which provide diversified earnings streams and reduce dependence on any single business segment. More than one-third of the company’s revenues are derived from exports, while its businesses generate stable cash flows across economic cycles.

According to Moody’s, Reliance has consistently demonstrated strong execution capabilities and financial discipline. The agency highlighted the company’s achievement of a net debt-zero position, conservative financial policies and substantial liquidity reserves. Reliance currently holds around $25 billion in cash and cash equivalents, providing significant financial flexibility and supporting its credit strength.

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Moody’s noted that Reliance’s credit profile would support a rating higher than Baa1 in an unconstrained environment. However, the company’s rating remains capped at two notches above India’s sovereign rating of Baa3 because of its substantial exposure to the domestic economy through its rapidly expanding retail and digital businesses.

The agency maintained a stable outlook on Reliance, reflecting expectations that earnings across its core business segments will continue to grow and that key credit metrics will remain strong over the next one to two years. Moody’s said any future upgrade would likely require an improvement in India’s sovereign rating, given the current sovereign-linked rating cap.

Annual performance

Reliance Industries delivered a steady performance in FY26 amid a challenging global economic environment, supported by robust growth in its retail, digital and consumer businesses.

According to the company’s 2025-26 annual report, RIL became the first Indian company to surpass $120 billion in annual revenue, underscoring the scale and breadth of its operations. Consolidated revenue rose 7.1% year-on-year to ₹10.71 lakh crore, while EBITDA increased 2.9% to ₹1.83 lakh crore. Net profit also grew 2.9% to ₹81,309 crore.

Chairman Mukesh Ambani said Reliance’s diversified business portfolio continued to drive growth, with consumer-facing businesses now accounting for more than half of the group’s EBITDA. The company’s retail, telecom and media segments remained key growth drivers, helping offset weakness in the oil-to-chemicals business amid global market volatility.

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TCS, Infosys

Alongside Reliance, Moody’s also upgraded the ratings of three other major Indian corporates following the methodology revision.

Tata Consultancy Services (TCS) and Infosys were upgraded to A2 from Baa1. Moody’s cited their highly diversified global operations, debt-free balance sheets, strong profitability, substantial cash reserves and consistent free cash flow generation. The agency said both IT services giants are now rated at India’s local currency ceiling and are among the few Indian companies rated four notches above the sovereign.

Meanwhile, Tata Steel was upgraded to Baa2 from Baa3. Moody’s said the rating incorporates a one-notch uplift based on its expectation of extraordinary support from Tata Sons during periods of financial stress. The rating agency also highlighted the benefits Tata Steel derives from its association with the Tata Group, including improved access to funding and capital markets.

The rating actions underscore Moody’s view that several leading Indian corporates possess business and financial characteristics strong enough to withstand sovereign-related risks, reflecting their growing global scale, financial resilience and operational strength.

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