Shares of Reliance Industries Ltd’s (RIL) rose to ₹2,451 apiece on the BSE in Monday’s opening deals after the company’s consolidated profit fell nearly 15% year-on-year (YoY) to ₹15,792 crore in the third quarter ended December 2022 of the current fiscal (Q3 FY23). Reliance’s telecom arm reported a 28.3% rise in third-quarter profit while the retail segment’s quarterly revenue grew over 17%.
What brokerages say on RIL shares post Q3 results –
“Retail revenue growth missed est, but strong store additions and improving footfalls paint a strong growth outlook in FY24E. Jio’s sub adds were a tad lower, but rapid 5G roll-out should drive strong growth. O2C benefited from strong diesel spreads and cheap crude blending; Chinese demand recovery can lead to earnings upside in FY24. Capex remains elevated. Retain Buy on Reliance Industries with a target price of ₹3,110,” said global brokerage Jefferies.
It forecasts 18% Ebitda growth in FY24E driven by 24% in RR and 23% in Jio and sees possible earnings upside from O2C if China’s demand recovers by mid-CY2023. Tariff hike in Jio, removal of export duties are other triggers. Current stock price imputes little value to green energy in the brokerage’s view.
“We expect Reliance Industries’ earnings to improve as petchem recovers (from China), MJ1 commissions, and Jio is likely to see tariff hikes. However, FCF would be constrained by high capex. Monetization of verticals and development of new energy projects are key triggers. We retain BUY on the stock with a target price of ₹2,750,” as per another brokerage Emkay.
“We expect GRMs to stay lofty (USD5-6/bbl) on strong middle distillate cracks, albeit below CY23. Windfall tax will remain a near-term earnings drag. Windfall tax on HSD/ATF exports shall drag earnings in the near-term. RIL’s new energy rollout shall unleash its next leg of growth, besides aiding conventional business (New energy upgrade). Retain ‘BUY/SO’ with a target price of ₹3,205,” said Edelweiss in a note.
The views and recommendations made above are those of individual analysts or broking company, and not of Mint.
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