RIL stock rises ahead of second quarter earnings, here’s what to expect
Shares of Reliance Industries Ltd (RIL) gained more than 1% ahead of the second quarter results of the conglomerate led by Mukesh Ambani which are expected to be announced today. Large cap stock rose 1.5% to Rs 2,664 from the previous close of Rs 2,623 on BSE. RIL shares gained after 2 consecutive days of decline. The stock is trading above the 20-day, 50-day, 100-day, and 200-day moving averages, but below the 5-day moving averages.
RIL stock has gained 24.8% in one year and is up 32.5% since the start of this year.
A total of 1.73 lakh of shares in the company changed hands for turnover of Rs 45.72 crore on BSE.
The market capitalization of the conglomerate rose to Rs 16.68 lakh crore.
The stock hit its 52-week high at Rs 2,750 on October 19, 2021 and its 52-week low at Rs 1,830 on January 29, 2021.
The stock has gained 26.55% since its first quarter results announced on July 23 of this year.
It closed at Rs 2,105 on July 23.
YES Securities brokerage expects 36.50 percent year-on-year growth and 4.8 percent quarter-on-quarter net profit to Rs 14,472.70 crore as of Q2FY22. Revenue is expected to increase 35.90% year-on-year and 8% quarter-on-quarter for the quarter ended September 30.
Centrum Broking expects RIL to post a 31% and 38% year-on-year increase in EBITDA and PAT, respectively, thanks to a strong recovery in retail and upstream segment growth.
“Improved EBIT for the retail or upstream segments will offset Jio’s subdued performance in the second quarter. Jio’s net subscriber addition of 7 million to 8 million is expected to be well below the average for the past two quarters from 14 to 15 million, driven by significantly higher churn rate of lower-ranking customers in August-September. Average revenue per user (ARPU) however reached around 142 rupees, resulting in 3% growth in EBITDA QoQ for Reliance Jio, ”said Centrum Broking.
Brokerage firm Nomura downgraded Reliance Industries to “neutral” instead of “buy”, citing high valuations after the recent rally.
However, the brokerage raised its target price on RIL shares to Rs 2,850 from Rs 2,400, indicating a 6% increase.
The outlook for Reliance Industries’ key businesses has improved, the brokerage said.
“We reduced FY22F / FY23F EBITDA by 10% / 6% due to weakness in the first half of FY21 and delays in telecom price increases. In our opinion, after the recent strong advance, the valuations at 20.5x FY23F P / E and 12x FY23F EV / EBITDA are rich, ”he said.
In the first quarter of the current fiscal year, RIL reported a 7% drop in net income as higher spending offset smart gains across businesses from O2C to telecom and retail. .
Consolidated net profit amounted to Rs 12,273 crore in the April to June quarter, compared to Rs 13,233 crore a year ago.
Spending, including taxes, climbed more than 50%, offsetting gains in the petroleum-to-chemicals (O2C), telecommunications and retail sectors. Expenses reached Rs 1.31 lakh crore including tax expenditures reaching Rs 3,464 crore.