Shares of Reliance Industries Ltd (RIL) fell nearly 2 per cent ahead of the Mukesh Ambani-led conglomerate's Q4 earnings set to be announced today. RIL shares slipped 1.74 per cent to Rs 2,594.60 on BSE against the previous close of Rs 2,640.75 on May 5. The earnings will be announced after market hours. The large-cap share has lost 7.36 per cent in the last five sessions. The share trades higher than 50-day, 100-day and 200-day moving averages but lower than 5-day and 20-day moving averages.
RIL share has gained 35.21 per cent in one year and risen 10.76 per cent since the beginning of this year. Total 1.93 lakh shares of the firm changed hands amounting to a turnover of Rs 50.61 crore on BSE. The market cap of the conglomerate stood at Rs 17.78 lakh crore
The share hit a 52-week high of Rs 2,855 on April 29, 2022, and a 52-week low of Rs 1,906 on May 14, 2021. The conglomerate is likely to report a strong set of earnings today, according to brokerages.
ICICI Securities has given an 'add' call to the stock with a target price of Rs 2,960, a nearly 12 percent upside from the current market price.
"Reliance Industries (RIL) is set to report a strong compounded annual growth rate in earnings (29 per cent) over FY22-24E led by robust OTC (oil to chemicals) margin environment, steady growth in digital services and strong momentum in its retail segment," said ICICI Securities in a report.
The ongoing invasion of Ukraine by Russia has proved to be a positive for oil-to-chemical (OTC) business of the company, the brokerage added.
"The Russian-Ukraine conflict has accelerated an already tight demand-supply situation for crude/products, particularly in key European markets, supporting assumptions of a bullish environment for OTC margins over the next 12-18 months," said ICICI Securities.
Pavitraa Shetty, Co-founder, and Trainer, Tips2Trades said, "While the general consensus is that the petrochemical margins would show sharp improvement due to rising crude prices, we believe retail and Jio should also surprise positively and expect a strong YoY performance from Reliance. Technically, Rs 2,550 remains strong support with major resistance at Rs 2,678. Investors should look to accumulate on every dip near support levels."
YES Securities in an earnings preview said RIL is likely to report 41.70 per cent and 30.50 per cent year-on-year (YoY) growth in revenue and net profit in Q4, respectively. Net profit and revenue is seen rising 4.7 per cent and 14.50 per cent on QoQ basis.
"RIL is expected to report YoY and QoQ improvement in earnings on account of robust refining margins, offset partially by weaker petrochemical margins. Telecom segment is expected to benefit from higher ARPU (Average revenue per user) realisation and retail segment from sales traction driven by growth in network," said YES Securities.
On the other hand, Kotak Institutional Equities said RIL's adjusted profit after tax and net sales is likely to rise 32 per cent and 43.80 per cent, respectively, on a year on year (YoY) basis. EBITDA may rise 34.60 per cent on a YoY basis and 5.8 per cent QoQ, the brokerage said.
"We expect RIL's standalone EBITDA to increase modestly by 3 per cent QoQ reflecting improvement in underlying refining margins and likely higher volumes for both segments, which will be partly offset by a QoQ decline in petchem margins. We expect EBITDA for Jio to increase 5 per cent QoQ led by higher ARPU, which will be partly offset by a decline in the EoP subscriber base and retail to increase by 9 per cent QoQ driven by sustained strong performance across business segments," Kotak Institutional Equities said.
Net profit of the oil-to-telecom conglomerate rose 41.58 per cent year-on-year (YoY) to Rs 18,549 crore in Q3 of the previous fiscal against a profit of Rs 13,101 crore in the corresponding period last year. Consolidated revenue from operations jumped 52 per cent Y-o-Y to Rs 1.91 lakh crore. Reliance's retail segment reported a 23 per cent rise in YoY profits while the telecom segment logged an 8.9 per cent rise in third quarter profit, the company said.
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