Reliance Industries share price jumps after strong Q1 results; should you buy or sell stock?

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Published: July 22, 2019 11:51:23 AM

Shares of billionaire Mukesh Ambani-led Reliance Industries jumped in trade on Monday morning after the firm reported strong Q1 results for the April-June quarter.

Mukesh Ambani salary capped at Rs 15 crore for 11th yr in a rowRIL share price gained more than 1.8% to hit the day’s high at Rs 1,272 on BSE this morning.

Shares of billionaire Mukesh Ambani-led Reliance Industries jumped in trade on Monday morning after the firm reported strong Q1 results for the April-June quarter. RIL share price gained more than 1.8% to hit the day’s high at Rs 1,272 on BSE this morning. Reliance Industries has reported a  6.8% on-year rise in net profit at Rs  10,104 crore for the first quarter of FY20 as against Rs 9,459 crore in the corresponding quarter last fiscal year, beating street estimates. A Bloomberg poll of analysts had estimated the fist quarter net profit at Rs 9,696 crore and revenue at Rs 1.72 lakh crore. 

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Taking stock of the reported results, global firm UBS said that RIL has performend in a tough business environment yet again. Notably, for the firm, growth in the retail and telecom businesses helped offset a slowdown at its central oil refining and petrochemical operations. The consolidated revenue from operations surged to Rs 1.72 lakh crore in the period under review. The gross refining margins (GRMs) fell to $8.10 per barrel as against $10.5 per barrel in the same quarter last year. UBS said that the investors are likely to react positively to Q1 FY20 EBITDA. UBS has a buy rating on the stock with a target price of Rs 1,500.

According to Credit Suisse, there was a sharp decline in Jio’s ARPU and retail growth has also moderated during the quarter. Reliance Jio has posted a net profit of Rs 891 crore, a single-digit increase by over 6% compared to the last corresponding period. Notably, RIL’s ARPU fell to Rs 122 in the quarter. Further, Voice over LTE (VoLTE) consumption per subscriber was at 821 minutes per month. The research firm has maintained a hold rating on the shares, with a target price of Rs 1,350. The capex was higher in the quarter, due to higher spending on refinery. The petchem margins were supressed and polyester and polymer margins weakened, noted UBS. 

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