Skip to main content

RIL: buy, sell or hold post Q1 results?

The company reported a consolidated profit of Rs 13,248 crore for the first quarter of FY21.

 

Reliance Industries (RIL) share price slipped in the opening trade on July 31 after the company came out with its June quarter earnings.

The company reported a consolidated profit of Rs 13,248 crore for the first quarter of FY21, with Jio's ARPU growth of 7.4 percent QoQ at Rs 140.3 per subscriber per month beating Street expectations.

Consolidated profit during the June quarter 2020 (which included exceptional gain of Rs 4,966 crore from stake sale to BP in Reliance BP Mobility) increased 102.4 percent sequentially and the year-on-year increase was 30.6 percent.

Consolidated profit in the March quarter 2020 stood at Rs 6,348 crore and Rs 10,141 crore in the corresponding period of last year.


Here is what brokerages have to say about the stock and the company:

Prabhudas Lilladher | Rating: Buy | Target: Raised to Rs 2,170 from Rs 1,828

The brokerage house raised the price target on the stock factoring in higher valuation in Jio and retail business on rollover to FY23E versus earlier September 22 to factor in a higher multiple. It valued the hydrocarbon business in the September 22 valuation at EV/E of 8.5x vs 8x earlier.

Despite a sharp run-up in stock prices (+140% in the past four months), Prabhudas Lilladher believes positive news flow on global partnerships or stake sale is likely to keep valuations elevated.

Sharekhan | Rating: Buy | Target: Rs 2,400

Recent fund-raising strengthens RIL’s balance sheet; potential monetisation of the stake in retail business and Jio’s likely listing could create long-term value for investors. It expects PAT to clock CAGR of 20 percent during FY20-FY22E driven by digital and retail businesses.

It revised FY2021E-FY2022E EPS to factor in lower refining margin offset by higher other income (given a sharp rise in cash levels) and introduced FY2023E EPS and factored in an increased equity base of Rs 676 crore (for rights issues) over FY2022E-FY2023E.

The potential listing of Jio and stake sale in retail business could further unlock value from consumer-centric business and create long-term wealth for investors

Goldman Sachs | Rating: Buy

The Q1 was in-line, strong relative outperformance versus peers in a subdued quarter. The weaker energy was offset by stronger-than-expected retail performance.

Both retail and energy saw EBITDA decline due to local/global lockdowns, while telecom EBITDA grew 50 percent YoY on tariff hikes and higher data consumption.

The research house sees more upside in the stock in the near future and expects EBITDA to double by FY25 driven by hyper-growth from consumer businesses, CNBC-TV18 reported.

"Reliance Retail's topline performance was resilient considering the adverse operating environment. Reliance Jio’s performance was broadly in line but the ARPU at Rs 140 surprised positively," said Deepak Jasani, Head Retail Research, HDFC Securities.

"Reliance’s reported bottomline growth was helped by low tax rates due to new rates and deferred tax credit due to planned O2C restructuring and exceptional income of Rs 4,966 crore (net of taxes of Rs 1,508 crore) due to profit on the divestment of stake in domestic fuel retailing business."


Source - Moneycontrol.com

Comments

Post a Comment

Popular posts from this blog

Reliance Jio Q3 results: Profit grows to Rs 3,489 crore; ARPU rises to Rs 151

  The average revenue per user (ARPU) during the quarter came at Rs 151 per subscriber per month as against Rs 145 per subscriber per month in the September quarter. Reliance Jio, the telecommunications arm of Jio Platforms, on January 22 posted a net profit of Rs 3,489 crore for the quarter ended December 31, 2020. The profit was higher than the street expectations as analysts in a CNBC-TV18 poll had estimated the number at Rs 3,200 crore. Jio's net profit grew 15.5 percent QoQ as in the September quarter of FY21, its profit was Rs 3,020 crore. The average revenue per user (ARPU) during the quarter came at Rs 151 per subscriber per month as against Rs 145 per subscriber per month in the September quarter. A CNBC-TV18 poll had estimated ARPU at Rs 148.2. Revenue, including access revenues for the quarter, was Rs 22,858 crore ($3.1 billion), up 5.3 percent QoQ. A CNBC-TV18 poll had estimated revenue to the tune of Rs 18,165 crore. EBITDA for the quarter stood at Rs 8,483 crore ...
Post a Comment
Read more

Taking Stock | Profit-booking pulls Nifty below 14,450; Sensex drops 549 points

  All the sectoral indices ended in the red with IT and PSU bank indices falling 2 percent each. The market remained under pressure on January 15 on the back of profit-booking across sectors amid weak global cues. At close, the Sensex was down 549.49 points or 1.11% at 49,034.67, and Nifty was down 161.90 points or 1.11% at 14,433.70. "The market witnessed profit-booking and following global trends. Nifty continues to resist 14,600 and has taken a dip towards 14,360. If the market closes below 14,380 levels, we might see a correction till the levels of 14,180-14,200. Momentum indicators like RSI, MACD are indicating a small correction in the markets," said Ashis Biswas, Head of Research at CapitalVia Global Research. All the sectoral indices ended in the red with IT and PSU bank falling 2 percent each. Broader markets performed in line with the main indices with BSE Midcap and Smallcap indices falling 1 percent each. Tech Mahindra, GAIL, HCL Tech, Wipro and ONGC...
Post a Comment
Read more

Futures Trade | A bullish breakout of a flag pattern in HDFC

HDFC is moving in an uptrend with a minor corrective decline. The range is classified as a flag and a breakout of falling minor trendline confirms a possible upside. HDFC is moving in an uptrend with a minor corrective decline from Nov 20 highs. The decline is on lower, contracting volumes and suggests a correction within an ongoing trend. The range-bound action can also be classified as a flag as it is on coming off a sharp rally. A breakout of falling minor trendline confirms a possible upside. Buy around Rs 2300-2310. Keep a stop below Rs 2250 and hold for a target of Rs 2400 and above that to Rs 2450.
Post a Comment
Read more