Reliance Q2FY22 preview: Retail growth to drive earnings, EBITDA may rise 25%; RIL stock eyes Rs 3000

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October 21, 2021 2:16 PM

Mukesh Ambani's Reliance Industries Ltd (RIL) is likely to post strong growth in net profit led by a rise in EBITDA in the July-September quarter of FY22.

RIL, reliance, reliance Q2FY22 Analysts expect that Reliance will continue the momentum from the previous quarter into the second quarter of the current fiscal.

Mukesh Ambani’s Reliance Industries Ltd (RIL) is likely to post strong growth in net profit led by a rise in EBITDA in the July-September quarter of FY22. Analysts expect that Reliance will continue the momentum from the previous quarter into the second quarter of the current fiscal. The oil-to-telecom conglomerate has recently announced several acquisitions through subsidiaries, such as a 100% stake in Norway-based solar cell; panel and polysilicon maker REC Solar Holdings for $771 mn; and 25 million euros (USD29 million) stake in Germany’s NexWafe GmbH. On the stock performance front, RIL share price has soared nearly 10 per cent in the last month, 38 per cent in six months, and over 32 per cent in the year so far.

RIL Q2F22 Results on Friday: Brokerage Estimates

HDFC Securities Institutional Equities

HDFC Securities Institutional Equities expects RIL’s consolidated EBITDA to increase by 14% sequentially to Rs 266 billion. Oil-to-chemicals (O2C) EBITDA/tonne of crude processed is estimated to increase 22% sequentially, owing to improvement in gas & oil cracks by 28 per cent on-year and steady petchem margins. We expect EBITDA to increase by 25 per cent on-year to Rs 24.8 billion from its retail segment.

Centrum Institutional Research

Centrum Institutional Research remains optimistic on the profitability outlook for RIL in the near-term, with its estimates suggesting a peer leading 20 per cent EPS CAGR over FY21-23E, driven by 18.6 per cent CAGR in EBITDA, and higher other income and lower interest costs. The sustained change of earnings mix in favor of the consumer segments does help the margins, while cash flows are positively impacted by the higher profitability and relatively lower capex despite the aggressive plans around RW segments.

Ravi Singh, VP & Head of Research, Share India Securities

The company had reported a net profit after tax of Rs 13,843 crore in the last quarter. In the short term, the impact on quarterly financials will be limited but the move is clearly in line with the announced plans of the company and positive for the longer-term growth and financials and shareholder returns. It is expected that the company may deliver a strong performance in Q2 also similar to the previous quarter due to recovery in petrochemicals and the retail venture along with sustained growth in the digital services business. As various businesses are returning to normal post-pandemic, domestic demand has sharply recovered across all O2C businesses and is now near pre-Covid level. Taking into account all the factors, it is expected that the net income of the company may increase from 8-10% from the previous quarter.

Gaurav Garg, Head of Research, CapitalVia Global Research

Reliance Industries Ltd (RIL) is set to post great performance for the second quarter. We expect the total income to increase by 15 per cent to 10,8281 crore, EBITDA to increase by 12 per cent to Rs 14,220 crore and net profit to increase by 13 per cent to Rs 9,746 crore, sequentially.

Aamar Deo Singh, Head Advisory, Angel One

Reliance Industries is expected to post decent Q2 earnings, on the back of consistent growth in its retail business and JIO. Recovery in refining margins could further add to its finances.

Stock Talk: RIL share sets eyes on Rs 3,000

Ravi Singh, VP & Head of Research, Share India Securities

Technically, all the indicators like RSI, MACD and long term MAs are showing bullish trend on daily basis. Reliance may touch the level of 3000 in near term.

Aamar Deo Singh, Head Advisory, Angel One

Reliance stock has gained over 30% since the past quarter, clearly showing investor confidence and interest in the stock. Long-term prospects continue to remain positive. Dips can be used for accumulation, from an investment perspective.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

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