Reliance Industries Ltd (RIL) share price traded flat with a negative bias on Monday morning while benchmark indices continued to remain under the firm grip of bears. Mukesh Ambani’s Reliance Industries reported a strong quarterly report card, where net profit shot up 41.5% on-year basis to clock in Rs 18,549 crore (including an exceptional gain). RIL’s total income rose 52% from the previous year to reach Rs 1.95 lakh crore. RIL share price hit an intraday high of Rs 2,504 per share, up 1% from the previous week’s closing, but fell flat minutes into the day’s trade. That outperformed benchmark indices BSE Sensex and NSE Nifty, which were down more than 1% each.
Motilal Oswal: Buy
Target price: Rs 2,800 per share
Motilal Oswal analysts have reiterated bullish outlook on RIL stock, seeing the overall healthy performance. The brokerage firm expects further improvement in Reliance Jio’s Average Revenue Per User (ARPU) on the back of tariff hikes. “Furthermore, as RJio’s growth slows, Jio Platforms Ltd (its holding company) is keen to replicate the success of Wireless in other business streams, with aggressive plans and product launches in place,” analysts said. The Retail business is valued at 35x EV/EBITDA. “Our premium valuation multiples capture the opportunity for rapid expansion in the Retail business and the aggressive rollout of digital ventures, including the JioMart platform.”
Yes Securities: Buy
Target price: Rs 2,845
The traditional cash cow of RIL, its oil-to-chemical business was back in favour during the October-December quarter amid stronger realisations, albeit the demand environment was tepid. “The demand environment, on the other hand, was weak, with domestic petroleum demand lower by 3.8% YoY, polymer by 4% YoY and Polyester by 5% YoY, respectively,” analysts at Yes Securities said. However, they believe that there could be some respite on the demand front going ahead as economic revival takes center stage. RIL is expected to touch a price target of Rs 2,845 per share implying a target P/E multiple of 22.6x FY24e, as against 19.7x the stock is currently trading at.
Emkay Global: Hold
Target price: Rs 2,730
Analysts at Emkay global believe RIL’s performance was in line with their estimates. The brokerage firm has cut FY22E EPS due to lower Jio subscribers and petchem margins and has trimmed target price marginally. “The reduction in the O2C multiple is the key reason behind the marginal cut in TP despite roll-over,” they added. Analysts believe it is time to keep holding the stock and wait for further triggers for the oil-to-telecom conglomerate. “More clarity on New Energy is awaited for a re-rating. Higher GRMs, petchem margins, gas prices and Jio subscriber adds with tariff hikes are key catalysts besides any monetization plans,” analysts at Emkay said.