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Business News/ Markets / Stock Markets/  Reliance share price ends lower after Q4 result; should you buy, sell or hold? Here's what top brokerages say
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Reliance share price ends lower after Q4 result; should you buy, sell or hold? Here's what top brokerages say

Reliance share price has risen about 37 per cent over the last year, outperforming the equity benchmark Nifty 50 which has gained nearly 27 per cent in the same period.

Reliance share price has risen about 37 per cent over the last year. (Agencies)Premium
Reliance share price has risen about 37 per cent over the last year. (Agencies)

Reliance share price ended in the red on Tuesday, April 23, a day after the company reported its March quarter scorecard. Reliance share price ended 1.36 per cent lower at 2,919.50 apiece on NSE while the benchmark Nifty 50 ended with a gain of 0.14 per cent.

Reliance share price has risen about 37 per cent over the last year, outperforming the equity benchmark Nifty 50 which has gained nearly 27 per cent in the same period.

Reliance share price hit its 52-week high of 3,024.90 on March 4 this year while its 52-week low level is 2,220.30 which it hit on October 26 last year. On a monthly scale, Reliance share price has been flat in April so far following five consecutive months of gains.



Reliance Q4 result

Reliance's gross revenue increased by 10.8 per cent year-on-year (YoY) to 2,64,834 crore. However, profit after tax (PAT) remained almost flat at 21,243 crore against 21,327 crore in the same quarter last year.

The company said its EBITDA increased by 14.3 per cent YoY to 47,150 crore with all businesses contributing strongly.

Read More: Reliance Q4 result: Revenue up 11% YoY, PAT comes almost flat; 5 key highlights

Should you buy, sell or hold?

Most brokerage firms retained their positive views on Reliance after the company's March quarter earnings. Some of them have raised their target prices for the stock as they believe the company is done with its capital expenditure cycle.

Motilal Oswal Financial Services

Motilal retained its buy rating on RIL with a target price of 3,245, citing the Q4FY24 EBITDA and PAT of RIL were above estimates primarily due to the growth in the O2C (oil-to-chemicals) segment, which was partly offset by lower-thanestimated performance in the retail segment.

The brokerage firm has raised its capex estimates to 1.2 lakh crore for FY25E and FY26E each.

"Using our SoTP approach, we value the refining and petrochemical segment at eight times FY26E EV/EBITDA to arrive at a per share valuation of 1,029 for the standalone business. We ascribe an equity valuation of 810 per share to RJio and 1,593 per share to Reliance Retail as well as 37 per share towards the new energy business," said Motilal Oswal.

Nuvama Wealth Management

The brokerage firm raised its target price by 10 per cent to 3,500 keeping a 'buy' recommendation on the stock.

It expects RIL's consumer business (digital and retail) to contribute nearly 50 per cent to EBITDA from FY25 given its strong expansion and customer base.

"We are now ascribing a rich valuation to Jio and Reliance Retail seeing their huge potential while remaining positive on the core O2C business (both refining and chemicals). We believe refining margins in Asia would rise due to a paradigm shift in regional refining dynamics from West to East, which are favourable for a complex refiner like Reliance," Nuvama said.

"RIL is almost done with its capex cycle, investing in world-scale projects such as petcoke gasification, off-gas crackers and telecoms, which are expected to drive future growth in months to come. RIL has started commissioning and remaining projects of KG-D6, which shall enhance overall gas production. RIL’s foray into the new energy business shall unleash the next leg of growth, besides aiding its conventional business," the brokerage firm said.

Kotak Institutional Equities

Kotak maintained an 'add' call on the RIL with a revised fair value of 3,200, up 10 per cent from 2,900 earlier.

"We marginally lower FY2025-26E EBITDA by nearly 1-2 per cent on lower subscriber additions in RJio after Vodafone Idea’s fundraising. However, we revise our fair value to 3,200 from 2,900, driven by the roll-forward to March 2026E (from December 2025E), higher long-term ARPU estimates in RJio, nearly 45 per share contribution from Disney-Viacom JV, lower net debt and moderation in capex intensity," Kotak said.

Kotak said while it remains optimistic about RIL's earnings growth (nearly 14 per cent three-year consolidated EBITDA CAGR), the upside seems limited at the current market price.

Emkay Global Financial Services

Emkay retained its 'add' call on the stock with a target price of 3,200.

The brokerage firm is positive about Jio tariff hikes while it expects oil and gas and retail to remain steady. It has raised FY25-26E earnings by 2-5 per cent each and SOTP-based target price by 8 per cent to 3,200 on the back of higher profitability in Jio (due to ARPUs) and roll-over to Mar-26E.

Apart from the above domestic brokerage firms, top global brokerage firms including Jefferies and Morgan Stanley also retained their positive views on the stock.

Jefferies maintained a buy call on Reliance with a target price of 3,380. It raised FY25 and FY26 EBITDA estimates by 3 per cent and 1 per cent respectively, according to CNBC-TV18.

Morgan Stanley maintained an overweight call on Reliance with a target price of 3,046, reported CNBC-TV18.

"See multiple catalysts for re-rating across verticals as the company exits fourth investment cycle," CNBC-TV18 quoted Morgan Stanley saying so about Reliance.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 23 Apr 2024, 09:23 AM IST
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