Reliance Industries Ltd (RIL) share price fell over 5.5 per cent to Rs 1,932.20 apiece on BSE today, despite posting a 12.55 per cent rise in the consolidated net profit to Rs 13,101 crore in October-December quarter.
Morgan Stanley sees significant upside risk to earnings and multiples for O2C as RIL has invested in new energy/technology
Reliance Industries Ltd (RIL) share price fell over 5 per cent to Rs 1,932.20 apiece on BSE today, despite posting a 12.55 per cent rise in the consolidated net profit to Rs 13,101 crore in October-December quarter. RIL stock was last seen at this level on December 23, 2020. While the total income of the oil-to-telecom conglomerate fell 20 per cent on-year to Rs 1.28 lakh crore in the fiscal’s third quarter. Similarly, revenues of the refining and petrochemical business were down to Rs 83,838 crore in the reported quarter from Rs 1.19 lakh crore, a year ago. AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online that even as the Q3FY21 results of Reliance Industries were satisfactory as compared to the Street expectations, the market had already discounted the Future Retail deal and improvement in results beforehand.
“With stiffer competition from Bharti Airtel in the telecom space and a long due correction in the Indian indices, Rs 1850-1900 will remain great levels for investors to re-enter the stock for targets of Rs 2200-2450 in the coming months,” Ramachandran said. Analysts at Prabhudas Lilladher and Motilal Oswal Financial Services see up to 13 per cent upside in the stock and have recommended the buy.
Reliance Industries has informed that it has completed the spin-off of the firm’s oil-to-chemical business into a new unit that will help it pursue growth opportunities with strategic partnerships. It was for the first time when Reliance Industries reported integrated earnings of its O2C business in its third-quarter financial results. Last year, Reliance started working on hiving off the O2C business into a separate unit for a possible stake sale to companies such as Saudi Aramco. Motilal Oswal Financial Services believes the spike in petchem margins was led by pent-up demand post COVID. “Moreover, huge capacity additions in China would further lead to pressure on petchem margins in the coming months,” it added.
It will Reliance Industries Ltd (RIL) stock price to jump 13 per cent from the previous close to hit the target price of Rs 2,325 apiece pegged by Motilal Oswal Financial Services. Those at Prabhudas Lilladher believe positive news flow on global partnerships or stake sale could keep valuations at elevated levels. The domestic brokerage firm has given a buy rating to the stock with a target price of Rs 2,232, implying an upside of nearly 9 per cent from the previous close.
While analysts at Edelweiss Securities Ltd have given a ‘hold’ rating to the stock with a target price of Rs 2,105 apiece, with nearly 3 per cent gain. “PAT of Rs 131bn (up 13% YoY, 37% QoQ) beat estimates, but was entirely driven by investment income and near-zero tax liability. O2C and retail missed expectations, but RJio beat forecasts. While recovery is underway, it is mixed,” the analysts added.