Shares of Reliance Industries Ltd (RIL) gained over 1% ahead of the Mukesh Ambani-led conglomerate’s Q2 earnings set to be announced today. The large cap stock rose 1.5% to Rs 2,664 against previous close of Rs 2,623 on BSE. RIL stock has gained after 2 days of consecutive fall. The share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
RIL share has gained 24.8% in one year and risen 32.5% since the beginning of this year.
Total 1.73 lakh shares of the firm changed hands amounting to turnover of Rs 45.72 crore on BSE.
Market cap of the conglomerate rose to Rs 16.68 lakh crore.
The share hit 52 week high of Rs 2,750 on October 19, 2021 and 52 week low of Rs 1,830 on January 29, 2021.
The stock has gained 26.55% since its announced Q1 earnings on July 23 this year.
It closed at Rs 2,105 on July 23.
Brokerage YES Securities expects a 36.50 per cent YoY and 4.8 per cent QoQ growth in net profit at Rs 14,472.70 crore in Q2FY22. Revenue is likely to rise 35.90 per cent YoY and 8 per cent QoQ for the quarter ended September 30.
Centrum Broking expects RIL to post a 31 per cent and 38 per cent YoY rise in EBITDA and PAT, respectively, helped by a strong recovery in retail and growth in the upstream segment.
“An improvement in EBIT for the retail or upstream segments will offset the muted Jio performance in Q2. Jio’s net subscriber addition of 7-8 million is expected to be sharply lower against the last two-quarter average of 14-15 million, driven by sharply higher churn of lower-rung customers in August-September. Average revenue per user (ARPU), however, grows to around Rs 142 levels, driving a 3 per cent QoQ EBITDA growth for Reliance Jio,” Centrum Broking said.
Brokerage firm Nomura has downgraded Reliance Industries to ‘neutral’ from ‘buy’, citing rich valuations after the recent rally.
However, the brokerage raised its target price on RIL stock to Rs 2,850 from Rs 2,400, indicating a six percent upside.
The outlook for Reliance Industries’ key businesses has improved, the brokerage said.
“We cut FY22F/FY23F EBITDA by 10 percent/6 percent due to weak H1 FY21 and delays in telecom tariff hikes. Our FY22F/FY23-24F earnings are 8 percent/ 16 percent higher than consensus, and we see low scope for an earnings surprise. In our view, after the recent strong run, valuations at 20.5x FY23F P/E and 12x FY23F EV/EBITDA are rich,” it said.
In Q1 of the current fiscal, RIL reported a 7 per cent fall in its net profit as higher expenses negated smart gains across businesses from O2C to telecom and retail.
Consolidated net profit came in at Rs 12,273 crore in April-June quarter compared with Rs 13,233 crore a year ago.
Expenses, including taxes, soared over 50 per cent, neutralising gains in oil-to-chemicals (O2C), telecom and retail businesses. Expenses rose to Rs 1.31 lakh crore, including tax expenses climbing to Rs 3,464 crore.