Why Reliance Industries share price fell over 4% in trade today
BusinessToday.In August 5, 2019
Reliance Industries share price fell over 4% in early trade today after brokerage Credit Suisse cut target price for the Mukesh Ambani-led conglomerate citing cautious view on refining and petrochemical cycle. Reliance Industries share price fell up to 4.63% to 1129 level compared to the previous close of 1184.20 on BSE. Reliance Industries share price has fallen after two days of consecutive gain.
Reliance Industries share price has fallen 3.92% during the last one year and gained 0.86% since the beginning of this year. 20 of 34 brokerages rate the stock "buy" or 'outperform', 10 "hold" and two "underperform" and two "sell", according to analysts' recommendations tracked by Reuters. Credit Suisse downgraded Reliance Industries to underperform from neutral and cut target price to Rs 995 from Rs 1,395 earlier.
The brokerage cited slow enterprise rollout and weak Jio average revenue per user in Q1 of the current fiscal as one of the reasons for the downgrade. It also cut FY21/FY22 earnings per share estimate by 5% to factor in lower refining and petchem margins.
Reliance Industries reported a 6.8 per cent year-on-year (YoY) growth in consolidated net profit at Rs 10,104 crore for the first quarter ended June 30, 2019.
"The Mumbai-headquartered company had posted consolidated net profit of Rs 9,459 crore in the same quarter last year," RIL said.
RIL's consolidated net revenue grew by 22.1 per cent to Rs 172,956 crore in April-June quarter of FY20, compared to Rs 141,699 crore in the corresponding quarter.
Other income increased to Rs 3146 crore in Q1FY20 against Rs 1,778 crore in Q1FY19.
The company's operating profit (EBITDA) rose by 5 per cent y-o-y to Rs 22,013 crore from Rs 20,957 crore in the corresponding period of the previous year, helped by strong operating performance in retail and digital services business.
Gross refining margins (GRMs) declined for the eighth consecutive quarter to USD 8.1 per barrel as against USD 10.5 per barrel in the same quarter last year. In the March quarter, it stood at USD 8.2 per barrel.
The revenue of petrochemical business dipped by 6.64 per cent to Rs 37,611 crore during Q1FY20 as compared to Rs 40,287 crore in the same quarter last year, dented by slowdown in demand.
Edited by Aseem Thapliyal