Reliance Industries Ltd (RIL) share was trading lower a day after the Mukesh Ambani-led conglomerate announced its Q1 earnings for the current fiscal. RIL stock fell up to 2.62% to Rs 2,053 against previous close of Rs 2,108 on BSE. The share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.
The large cap share has gained 79.37% in one year and risen 38.13% since the beginning of this year. The share has surged over 20% in a month.
Total 7.65 lakh shares changed hands amounting to turnover of Rs 159.27 crore. Market cap of the firm fell to Rs 13.25 lakh crore. At 11: 10 am, the share was trading 1.05% or Rs 22.15 lower at Rs 2,086 on BSE.
RIL on Thursday reported record net profit of Rs 13,248 crore in June quarter after one-time gain from stake sale as well as bumper telecom revenues cushioned COVID-19-hit earnings from refining, petchem and retail segments.
Net profit in Q1 was 30.6 per cent higher than it was in the same period a year back, and bettered the company's previous best of Rs 11,640 crore earning in October-December 2019, the company said.
The oil-to-telecom conglomerate said it logged a one-time gain of Rs 4,966 crore from sale of 49 per cent stake in fuel retailing venture to BP Plc.
RIL's telecom arm Jio recorded a 183 per cent rise in standalone net profit to Rs 2,520 crore and covered up for drop in earnings from mainstay segments.
Motilal Oswal in a note said, "Using SOTP, we value refining and petrochemical segment at 7.5 times to arrive at a valuation of Rs 545/share for the standalone. We have ascribed an equity valuation of Rs 1,125/share to RJio and Rs 580/share to Reliance Retail. Reiterate Buy with a target price of Rs 2,250/share."
Abhijeet Ramachandran from Tips2trade said, "Despite the lockdown,expectedly, Reliance Jio has posted very encouraging results with strong growth in ARPU. However, other segments like petrochemical & especially retail have underperformed as compared to street estimates. Technically, the stock is due for a much needed correction. A close below Rs 2050 could lead to lower targets of Rs 1980 to 1900 which could be good levels for new investors to re-enter the stock."
Edelweiss Securities in a report said, "On the path to zero net debt by FY22, we believe RIL would comfortably achieve zero net debt by FY22 following its rights issue and stake monetisation in several businesses, even after accounting for creditor capex and spectrum liabilities. Adding the creditor capex of Rs 50,000 crore and spectrum liability of Rs 20,000 crore, we reckon an adjusted net debt figure of about Rs 2.57 lakh crore.
RIL recently raised INR2.13tn through an Rs 53,000 crore via rights issue and Rs 1.52 lakh crore from sale of Jio Platform shares. Along with free cash flows, we believe that RIL shall comfortably turnnet cash by FY22E. Mantain 'HOLD' with unchanged target price of Rs 2,105."