Strait of Hormuz supply shock (18 mentions) colonised Q4FY26.

Just wanted to understand the cost differential between an UBR versus FWA. What is the difference in the cost for CPE for us? Is it material difference? Does it make sense for us to be so aggressive on UBR? Is it a long-term solution versus a fiber or still fiber is more preferred over UBR and FWA?

So, the cost difference on the CPE device itself will not be too material, it is kind of similar. But the network equipment is more economical for us. The way we have developed it. Between fiber and UBR, it really is a function of if your fiber is there. So, if I have a connected building with fiber, you will of course want to use that fiber. Well, I should not even say it is long term because UBR is also a long-term solution. That spectrum is there. The equipment work, they have long life. Of course, these are new, but they will have several couple of decades, 20 years, 25 years kind of life these equipments will have. You can continue to use that. And given global allocation of these spectrum bands for Wi-Fi purposes, for unlicensed use, the spectrum is going to be available. So, there is no reason to think it is not long term sustainable. But FWA people had this question that you will run out of capacity on the network, you will have more use cases coming in, there would not be sufficient capacity but with UBR that is not a constraint. Cost wise also it is more economical. Last mile fiber is more expensive. So, in all those regards it is going to be much more sustainable. Fiber if it is already there then of course you still want to go with fiber.

On the 2.6 million addition on FBB, we understand there was an offer, IPL and all. What is the sustainable number in addition are we looking at or post Jio what was the addition we are doing?

It has been fairly steady even after that, even post IPL the run rate has not slowed down really. We are still giving some commercial offers on the ground because we want people to come in and start using these services, but the run rate has been fairly steady, in fact it has picked up. Our exit run rate was higher than the entry run rate. As I said, there are months when we are doing more than a million net add.

There is some moderation in retail revenue growth, right? So, there were some strategic changes that we had implemented last year and Q4 saw quite a strong pickup in retail revenue growth, right? So, I just wanted to better understand among categories is this only because of consumer electronics that we are seeing such kind of an impact in growth or was it led by some slowdown in other categories like grocery and fashion as well?

I think as Dinesh said consumer electronics we saw some impact, both grocery and fashion did reasonably well. There was a little bit of impact on devices as well. The device pickup was lesser in this quarter, but that tends to be a bit more bulky because that a lot of supplies happened to Jio, so inventory had been built up, but that is more temporary. So, only consumer electronics is where there was a slight impact and even that was growing, but the growth was lesser than what we were expecting. And remember Q1 is generally seasonally weak, it is the seasonally weakest quarter. Growth will pick up, a lot of new store additions happen in Q2 and Q3 because you try to get a strong start with onset of festive season. So Q1 always is a muted quarter.

Sequentially we have seen 6-7% drop in revenue, but our margins have remained stable or slightly improved only. So typically, in retail with sort of lower revenues we see a lot of negative leverage, right but we have done a really good job there. So, what are the key things that we have done to sort of deliver such kind of a margin performance? And with sort of pickup in the coming quarters, can we expect a good amount of margin gains this year vis-à-vis last year?

See, there is a lot of optimization that we have been doing over the last year, and those impacts are following up, flowing through quarter and quarter. When you let us say close a store, there is a cost associated, three to six months you run down, you finish the inventory and then you have to pay rental, three months lock in, all of that happens, right. So those benefits flow through over a period of time, right. So, I think the margin is a result of a lot of cost discipline that we have been kind of looking at. And you are absolutely right that as the business grows further in Q2 and beyond as growth picks up, the margin should expand at a segment level. At an aggregate level, it is a mixed impact because different businesses have different margins but absolutely, at each business level, the margin should expand.

Anshuman, you spent a substantial amount of time in the presentation talking about the in-house technology stack that you have built at the Jio platform level. When you think about translation of that into numbers for the business, one is obviously market share, where on the fixed side you have done very well. But when you think what is the wireless market share, and also margin profile of the business, and then the capex profile of the business, where do you see this in-house stack to reflect in terms of numbers, let us say, in the next two, three, four, five years? And when you think about this quarter where you had substantial improvement in incremental margins in the business, which was missing in the last few quarters, is this now the new normal or would there be still quarterly volatility there?

On the first one, having our own technology and having control over that tech stack and being able to modify it in the way that we need it for our consumer services is going to have benefits across it just about everything. On the revenue side, we can ramp up much faster because all of this is completely in our control versus working with a vendor, where you are dependent on the vendor to do certain actions at the time that you really want to expand services. Here you are not dependent. On the cost side, it is very advantageous because you are not paying some huge license fee to somebody. There are still vendors who want on a per sub basis, when you are thinking about scaling it up from 20 million to 50 and then 100, you do not want to be paying per sub kind of prices. So, on cost side that is a big advantage. I would say one of the very big advantages is the ability to keep improving, keep configuring the stack as per your requirements, which becomes very difficult when you are dependent on an external vendor ecosystem, because then you are completely dependent on what they are able to deliver to you. We are no longer dependent on them. We can prioritize our requirements, and we can really go ahead and work on those. And then there is the additional revenue opportunity. This kind of tech stack and we are increasingly getting that confidence with our conversations with global operators. They all want to use this. And this is fairly deployable in whichever market you talk about. See today what happens is in some of the more developed markets, higher ARPU markets, it does not pinch them much. So if they are making $40 from home, they have only those many customers, they have sufficient networks, infrastructure, they do not mind just continuing with the high cost base but if somebody goes and tells them that instead of the $10 or $12 that you are spending on every sub, if you can do that at $3 or $4, that is additional margin. And that is why all of them are becoming interested. So, this tech stack should yield us a lot of incremental revenue opportunity as well over the next couple of years. So, several advantages and we are seeing that. Our LTE network or our 5G network, we can scale up as and when we want. We started with a core of 120 million. We have already expanded to 250, 300. And we can keep incrementally doing it. It is all in-house. It is all our cost only. So that is a very big advantage of having our own tech stack. On the margin front, again, we have the cost completely in our control. And therefore, the operating leverage, we should be able to control that much better. So hopefully, we do not have too many unexpected kind of expenses. And we should continue to see improvement because as more customers come and more revenues increase, hopefully the operating leverage will play out even more.

On quick commerce or Jio Mart, we saw very strong growth in quarter-on-quarter daily orders. When you think about this industry, which has now maybe become $10 billion plus at an industry level, the quick commerce industry, do you believe at some point in time to really capture the upside, you will have to build a dark store network that will require you to service within 15 minutes because competition is doing that and do you think that incremental 15-20 minutes will make a difference or substantial difference to demand and does it at any point in time given there are so many players in the industry make sense to consider growing inorganically in this business would that bring any kind of advantages or do you think organic growth is the right way to build it with the right cost structure?

So, I think two parts to it. See we are already building dark stores. Now the logic of dark stores it is not that if I have an existing store, if it is within the right radius, you can meet that SLA, right. A lot of our orders actually get delivered within 10 to 15 minutes. 30 minutes is the outer limit. Wherever there are gaps in the network or where there is enough order volume because beyond a certain order volume, it starts impacting the customer experience in the store. So, we are already building dark stores. We are in the process. We have rolled out quite a few in the top 10 cities already. So, the dark stores will come. Our own stores will continue to be the backbone of our model and dark stores will basically supplement the model and help me fill the gaps. That is the strategy that we are following. That is a big advantage. See today if you look at top 40-50 cities, more than 90% of the orders are coming from top 40-50 cities. We are already present in 1,000 cities. Most of the cities where we are doing quick commerce today, they will possibly not reach there in the next three years as well. Why should I give up that advantage? I will continue to leverage my store network. Wherever there are gaps, wherever I need to reduce the delivery radius or wherever there is enough order volume, we are going and setting up dark stores. We are not close to that idea. We are actually setting up quite a few dark stores, especially in city, places like South Bombay, where I do not have a big network. That is a large market. So, we are setting up a lot of dark stores. We do not want to leave any pocket where we are not competitive. Organic versus inorganic, it is an interesting one. We are as of now focusing, I would say. It makes sense. It is very difficult to integrate somebody with your existing network. We have been focusing on to be honest focusing on building our network organically. And we have a big customer base which is already there with us.

Are you seeing enough demand in cities outside of top 50 or is it still like a largely top 50 city phenomenon?

No, we are seeing good demand. See, customers have aspirations and customers are looking for convenience, right? That is a learning that we had. Initially, we also were focusing on the next day delivery, but I guess we have realized that customers want convenience, the immediate gratification. You order something, you get it immediately, 10 minutes versus 30 minutes is debatable whether how many people value 10 versus 30 but we offer whatever the market offers. There is a consumer shift which is happening in consumer preferences across the board. In fact, smaller cities, the average basket values are not very different. The cost structure is much lower. So, the unit economics actually ends up, and I have an existing store, the economics works actually even better in the smaller cities. And for the other guys, because they will take time for those order volumes to grow beyond a certain level. For them, it will be difficult.

On retail, at some point of time at the presentation, you said that some follow-up course of the streamlining of operations, which happened last year, is still impacting. So firstly, by when do you think we can get to a clean quarter where those are behind us? And secondly, if we were to look at revenues adjusted for Jio, I mean, broadly the connectivity piece, that is going to be much lower than the reported 11% number that you have reported. So, is that also part of that streamlining thing, which is pending, or it is more in the margins?

So, I think it is more in the margin side. Let us say when you shut down a store, there is some time lag which happens. You have certain commitments. You have certain lock-ins. Once you stop your operations, it takes time to take out your inventory, and the people remain on the payroll for certain amount of time. So, it is not a very long period, it relates to stores that we closed in end of Q3 and Q4 for which some of the cost would have come in Q1, more or less it is done.

FMCG when you mentioned that, you know, now the demerger process is it done or it is not yet?

Not yet, it is under regulatory approvals. So once the regulatory approvals are in place, then the business will get demerged out.

And so, all the Reliance retail shareholders will be shareholders of exactly same.

Today it is 100% sub of RRVL, it will just move out and shareholding will get replicated.

On new energy, the modules, cells, you said that cell production will possibly, we are one quarter away from that. So, by when will we see the first of the integrated production in how many quarters and by when do you think we will be done with most of our requirements and could start looking to sell outside?

First of all, integrated manufacturing ecosystem. Look, we are not waiting for our wafer or polysilicon to get finished. We will start manufacturing modules, we will start manufacturing cell. As rest of the factories come in, we will start utilizing the entire integrated value chain. With respect to the sale to the external parties, we are already opportunistically looking at it, but our capital requirements are itself so large. And if you look at the entire land parcel that we have got, our capital requirements that we have got, we will be also very opportunistic in what business model works better for us. If selling an energy which is what as a solution provider as Reliance we look at, we will be selling energy rather than selling a product which is either module or wafer. That will be our focus. Opportunistically if there is an opportunity to sell and make better margins, probably we will look at it, but more as, I would say sporadic pockets rather than a strategy.

On JPL. Anshuman, clearly a good amount of investments have been made in tech and we are at a point where we did see connectivity growth being strong for the last many years. When we think about digital services, what are some of the components in that? We do know there is a corporate business, but what are some of the other parts? And when do we see an inflection point where all these businesses will grow up in a meaningful manner? For last few quarters, we clearly see the growth at 30% plus rate. Is this something which is sustainable? What are some of the drivers out here?

So, it is sustainable. I think these are basically tech and platform services that we are offering to enterprise customers mostly who are paying today. Cloud is contributing, cloud services contributing there. Consumer services, we are not really charging a lot for the services that we are offering other than for some of the content driven, you know, Jio TV or those subscriptions but we will gradually start charging. It should, the current run rate should actually improve because we are launching more services now. We do not have an immediate plan to start charging for these services for the consumer, on the consumer end but at some point in time, we will start monetizing those. And the enterprise run rate has been picking up, it has actually been improving over the last few quarters, and the traction is better now. So, you should expect more build up happening there.

And margins we see on the digital services are slightly lower than connectivity. Is that something those margins will also start improving going ahead?

Should improve with revenues increasing, but currently the margins are lower because we are still in that build phase really. We have a lot of infrastructure and people who are there now something like that AI cloud offering it is an expense today, so it does hit the P&L, but it is creating the market for us. So, we are making reasonable margin that is not an immediate priority building the market is and getting some revenues is and then we will gradually think about that.

Second question on retail. The Chairman in last AGM did mention about EBITDA doubling 3 to 4 years. If you look at the performance till now since last year, it has been much slower than that. Does that mean the implied growth is moving up and we should see more like 18 to 22% growth in terms of EBITDA going ahead?

If you look at last year, right, last year, a lot of streamlining was done, a lot of stores were closed. My net addition was very, very small, right? In spite of that, we had a pretty decent, growth. Now, that streamlining is past us, right? So, you would see acceleration of growth because logically as I am adding more stores, as I am accelerating my B2B and my online quick commerce businesses that will start contributing to meaningful revenue growth. So, you will see an acceleration in the coming quarters.

Just to follow up on Sachin's question on the JPL revenue Anshuman, it is 4000 Crores a quarter now, 40% Y-O-Y, the JPL minus connectivity. One, could you talk about the difference between the gross revenue and the operating revenue? What are these two?

In the slides that we presented. That is the GST.