Reliance Industries stock: RIL Q1 disappoints D-Street.... -
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Reliance Industries stock: RIL Q1 disappoints D-Street….

NEW DELHI: (RIL) June quarter results fell short of Street expectations but that could not change the consensus view on the stock meaningfully, despite a few contrasting views.

Post quarterly results, the consensus target on the scrip stays at Rs 2,881, similar to Rs 2,880 before earnings, with 80 per cent of recommendations suggesting a buy, 13 per cent hold and 7 per cent sell on the stock. The target suggests a potential 20 per cent upside for the stock.

“Prospects for the rest of FY23 have turned cloudy due to a sudden downturn in Asian GRMs, muted petchem spreads and the overhang of the additional export duties imposed,” said , which cut its target on RIL to Rs 2,710 from Rs 2,865 earlier.

The brokerage said it remains sceptical of meaningful expansion in return ratios and any major moves to return cash to shareholders in view of the sustained capex momentum over FY22-FY24.

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said RIL’s refining margin should remain subdued in the near term as GRMs plunged amid recession fears.
“Exports duty levy should further squeeze profits and have about a $4 GRM impact. Upstream shall nearly match retail EBITDA by FY24E driven by high gas prices and faster-than-expected KG-D6 ramp-up. New energy (recent upgrade) plan towards green H2 shall drive valuation re-rating, besides huge synergies with the existing O2C business,” it said while suggesting a target of Rs 3,205 on the stock.

Reliance Industries reported a 46.29 per cent year-on-year (YoY) surge in consolidated net profit at Rs 17,955 crore for the June quarter compared with Rs 12,273 crore in the corresponding quarter last year.

The oil-to-telecom major said its revenue for the quarter jumped 54.54 per cent to Rs 2,23,113 crore from Rs 1,44,372 crore in the same quarter last year. The ET NOW poll had forecast the sales figure at Rs 2,44,244 crore. The margin for the quarter came in at 17.3 per cent.

At 10.05 am, the RIL stock was trading at Rs 2,409, down 3.75 per cent. It was commanding a market cap of Rs 16.29 lakh crore compared with Rs 16.93 lakh crore on Friday, down Rs 64,000 crore.

JPMorgan, which has a target of Rs 3,170 on the stock. RIL reported a strong Ebitda across businesses and FY23 should be a strong year of growth, it said. The brokerage foresees multiple positives across businesses with volume growth in E&P. It noted that addition in net subscribers has started at Jio.

For Morgan Stanley, RIL’s Ebitda was in-line but a higher tax rate and rupee depreciation drove a 10 per cent earnings miss. A shutdown in chemicals and refining operations did surprise negatively, it said, adding that the performance of telecom and consumer retail segments was in-line. This brokerage has a target of Rs 3,253 on the stock.

CLSA said Mukesh Ambani-led oil-to-gas major still is one of the best earnings growth stories in India’s largecap space. It said oil-to-chemicals Ebit missed its estimates by 18 per cent while telecom and retail Ebitda was only a tab below its expectations, as it suggested a target of Rs 2,955. Macquarie finds the stock Rs 2,000 worthy, even as it increased RIL’s EPS estimates by 1-2 per cent for FY23-24.

values RIL’s refining and petrochemical segment at 7.5 times FY24 EV/Ebitda. It has ascribed an equity valuation of Rs 960 per share to RJio and Rs 1,173 per share to Retail.

“Our higher EV/Ebitda multiples of 39 times for Retail and 18 times for Digital Services underscore new growth opportunities in the Digital space and steady market share gains. We reiterate BUY with a target of Rs 2,785,” it said.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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