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Shares of Reliance Industries (RIL) were trading 0.6% lower at 2,611 on the BSE in Monday's opening deals even after India's top value firm reported a 43% jump in quarterly profit, above analysts' expectations, as all its businesses witnessed a healthy performance. The oil-to-retail-to-telecom conglomerate's net profit in the second quarter came at 13,680 crore compared to 9,567 crore a year ago.

Improving hydrocarbon and retail segment has driven Q2 profits whereas Jio has also posted a resilient performance, said brokerage house Prabhudas Lilladher in a note. It believes that RIL is well positioned to incubate new business and pursue inorganic opportunities.

The launch of 5G Jio Phone is also expected to accelerate digitization and drive customer shift from 2G. Also, recovering economic activity augurs well for all RIL’s business segments and downstream focus which Prabhudas believes will create value, going ahead. It has maintained its ‘Buy’ rating with a price target of 2,955.

Jio Platforms profit jumped to to 3,728 crore for the second quarter ended September from 3,019 crore year-on-year (YoY). 

Brokerage house Emkay in a note stated that the management was optimistic about post-pandemic demand recovery going ahead. Meanwhile, Jio Phone Next will be unveiled soon. 5G is under active trial, while 4 million premises have been connected by JioFiber so far. 

“Our TP (target price) increase is driven by rollover, higher multiple for Retail (based on peers), introduction of new energy in SOTP (based on announced invested capital), higher GRMs, and lower debt. RIL’s macro outlook is steady, though after the recent stock run-up, valuation captures the upside," the brokerage said. It has a Hold rating on RIL shares with a target price of 2,750.

Emkay sees adverse commodity margins/currency and B2C competitive pressures as key risks.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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