
Shares of Reliance Industries (RIL) fell over 3 per cent in Monday’s morning trade after the oil-to-chemicals (O2C) business disappointed investors for the quarter ended June 30. Overall, the energy-to-telecom behemoth on Friday post-market hours reported a consolidated net profit of Rs 17,955 crore, up 46.3 per cent year-on-year (YoY), in Q1FY23 following strong performance across its energy, telecom and retail verticals.
Emkay Global Financial Services said that Reliance Industries consolidated EBITDA missed out an estimate by 10 per cent in Q1FY23 due to O2C EBITDA miss by 20 per cent at Rs 19,890 crore.
However, the brokerage retained a ‘Buy’ call on Reliance Industries with a target price of Rs 2,750, indicating an upside of over 10 per cent from the current market price of Rs 2,421.
Revenue from operations of the company grew 54.5 per cent YoY to Rs 2,23,113 crore during the quarter under review.
JM Financial downgraded the target price to Rs 2,950 (from Rs 3,000 earlier) post Q1 result. “RIL’s consolidated Q1FY23 EBITDA, at Rs 38,000 crore (up 21 per cent QoQ), was 9 per cent below JMF estimates of Rs 41,800 crore due to lower-than-expected jump in O2C segment EBITDA while the performance of the digital and retail segments was largely in line,” the brokerage said while retaining ‘Buy’ rating on RIL.
“Further, consolidated PAT (after minority interest) was around Rs 18,000 crore, significantly below JMFe/consensus of Rs 22,500 crore/Rs 21,600 crore) due to normalisation of the tax rate. O2C business EBITDA rose 40 per cent QoQ to Rs 19,900 crore, but was 14 per cent below JMF estimates on lower-than-expected jump in refining margin,” JM Financial said adding they reiterate ‘Buy’ on RIL due to its industry-leading capabilities across businesses and expectation of strong 16-18 per cent EPS CAGR over the next 3-5 years.
While retaining a ‘Buy’ call on RIL post Q1 results, brokerage Sharekhan also said, Q1FY2023 consolidated EBITDA and PAT were below our and consensus estimate due to a sharp miss of 20 per cent in standalone EBITDA, higher depreciation, and tax rate. It has a target price of Rs 3,050 for RIL.
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