What will analysts recommend after RIL posts better than estimated quarterly earnings?

Reliance Industries Limited (RIL) surprised D-Street by reporting better-than-expected earnings for the quarter ended March 31, 2023. RIL reported a sharp 19% year-on-year (YoY) rise in consolidated net profit for the reporting quarter to Rs 19,299 crore. It was significantly higher than the 4% growth projected widely by analysts. The consolidated revenue grew a mere 2% on-year to Rs 2.16 lakh crore, and was tad lower than the estimated Rs 2.22 lakh crore. However, much of this has come on the back of higher other income and lower taxes.

The results were announced after market hours. The stock ended at Rs 2,351 on the NSE and was up by Rs 4.95 or 0.21% from the Thursday closing price.

This is what investors can expect from the stock when markets reopen on Monday:

Parul Rao, Research Analyst at SAMCO Securities
Reliance Industries seems to be hitting all the right nerves across its businesses during the January-March period ie. Q4FY2023. Despite being topline flat year-on-year, the company posted its highest-ever quarterly profits of Rs 19,299 crores, a jump of 19% YoY.

The consumer-facing business took a front seat and drove the earnings. The company maintains a positive outlook across the O2C chain-driven business.

The Oil & Gas segment is poised to be a source of significant value and sustained earnings growth in the coming years. Reliance Jio is expected to continue its leadership position with a healthy subscriber base and new offerings. Going ahead, the retail segment is positioned for strong growth as the company has been bolstering its portfolio through acquisitions and expansion. The listing of Jio Financial services will unlock new opportunities for investors.

Avishek Datta, Research Analyst at Prabhudas Lilladher Pvt Ltd
Reiterates Buy | Target: Rs 2,834

Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas | Buy
RIL posted strong Q4FY23 performance with 7% beat in consolidated EBITDA at Rs 38,440 crore (up 9% q-o-q) led by better-than-expected standalone earnings off-setting marginal miss in retail EBITDA while Jio performance was broadly in-line.

Standalone EBITDA increased sharply reflecting the benefit of higher gasoline cracks and feedstock optimisation. Jio EBITDA was in-line with a 2% q-o-q increase to Rs 12,767 crore with steady ARPU of Rs 179 and net subscriber addition. Retail EBITDA was tad lower than expectation due to slower revenue growth while margin remained stable. The consolidated PAT was 14% above our estimate

Continued strong traction in its consumer-centric business to drive strong earnings growth for RIL and likely IPO for Jio/Retail remains the catalyst. RIL is our top pick and we have Buy rating on the stock.


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