The market value of Reliance Industries breached ₹20-lakh crore on Tuesday, the first company on Indian bourses to go past this mark.
RIL shares hit a fresh high of ₹2,958 on the BSE and gained 1.8 per cent intra-day on Tuesday. RIL ended the day 0.88 per cent higher at ₹2,930. The shares have gained 13.4 per cent in the year to date and surged 26.1 per cent in the last one year.
The conglomerate had reached a market cap of ₹15-lakh crore in September 2021.
RIL reported an in-line results for the third quarter ended December, with an operating profit at ₹40,660 crore , a growth of 15.4 per cent year-on-year. EBITDA growth was supported by upstream oil & gas and the retail segment. However, the overall growth was hindered by the oil to chemicals segment which experienced subdued growth on account of planned maintenance and inspection shutdown. Jio continued to grow with subscriber additions and higher data consumption, while retail growth came from across consumption baskets.
“We believe that stability in O2C margins is crucial for sustained earnings traction. However, weaker petrochemical margins, specially amidst anticipated capacity addition could hurt. RIL’s capex over FY24-25e is expected to remain elevated given the ongoing investment in telecom (5G), expansion of retail infrastructure and new energy business,” said a note by YES Securities, which maintained a Buy with a target price of ₹3,170 per share.
Emkay Global has raised its O2C EBITDA estimates across FY24-26E by 2-4 per cent each, led by a better refining margin outlook, post the turnaround, which should lift volumes and realised GRMs. Petchem prices overall are expected to be rangebound, as new Chinese supplies enter the market and global O2C outlook remains contingent on China’s demand-supply outlook.
In upstream, the brokerage has cut its realisation estimate by 15 per cent each over FY25-26E, reflecting the muted gas price trend in the medium-term but partly offset by lower opex, going ahead. Consequently, upstream EBITDA has been lowered 3 per cent each over FY25-26E; while the FY24 estimate has been revised up by 8 per cent, to reflect the YTD and current trends.