RIL share price rises almost 3% after Q2 results; top brokerages remain upbeat on the stock
Top brokerages remain positive on RIL stock after Q2 results. RIL share price hit its fresh 52-week high of ₹2,635.17 on July 19, 2023, and its 52-week low of ₹2,012.14 on March 20, 2023, on BSE.
RIL share price: Reliance Industries (RIL) share price rose almost 3 per cent in early trade on BSE on Monday, October 30, boosted by the company's September quarter earnings. The stock opened at ₹2,283.95 against the previous close of ₹2,265.25 and rose 2.6 per cent to the intraday high of ₹2,324.60 in trade so far. Around 11:55 am, the stock traded 2.24 per cent higher at ₹2,316 on BSE.
RIL shares have been lacklustre in the last one year. RIL share price has gained just one per cent while the equity benchmark Sensex has gained 7 per cent in the same period.
Reliance share price hit its fresh 52-week high of ₹2,635.17 on July 19, 2023, and its 52-week low of ₹2,012.14 on March 20, 2023, on BSE. As of the previous session's close, the stock is down over 14 per cent from its 52-week high level.
Reliance Industries Q2 Results
RIL on Friday (October 27) reported a 29.7 per cent year-on-year rise in its September quarter consolidated net profit at ₹19,878 crore. EBITDA jumped 30.2 per cent YoY to ₹44,867 crore while the EBITDA margin surged 390 bps YoY to 17.5 per cent.
Gross revenue, however, inched up marginally by 1.2 per cent YoY to ₹2,55,996 crore, supported by consumer businesses.
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Brokerages remain positive
Let's take a look at what top brokerages have to say about RIL stock after the Q2 earnings
Motilal Oswal Financial Services
Motilal Oswal has a buy call on the stock with a target price of ₹2,760.
"Using SOTP, we value the refining and petrochemical segment at 7.5 times FY25E EV/EBITDA to arrive at a valuation of ₹878 per share for standalone. We ascribe an equity valuation of ₹760 per share to RJio and ₹1,353 per share to Reliance Retail and ₹16 per share towards the new age business," said Motilal Oswal.
Motilal Oswal believes growth would be driven by the retail sector’s footprint additions and new categories, while the telecom business continues to focus on subscriber growth.
"In O2C, refining and petchem segments margins are picking up from the current levels as net capacity additions for both segments are tapering off on a YoY basis in CY24. Further, FY25 would see the full benefit from the ramped-up volumes at MJ field," said the brokerage firm.
Kotak Institutional Equities
Kotak upgraded the stock to a 'buy' from an 'add' and raised the target price to ₹2,725 from ₹2,600 earlier.
The brokerage firm pointed out that RIL’s Q2 consolidated EBITDA was ahead of its estimate.
"We revise our fair value (target price) upwards to ₹2,725 on an increase in contribution from R-Jio (nearly ₹49 per share EV accretion from FWA launch), Retail (higher EBITDA) and also roll-forward of valuations to Sep 2025 (earlier Jun 2025)," said Kotak.
The brokerage firm underscored that the outlook for each of RIL’s key segments remains robust.
"With R-Jio’s pan-India 5G rollout near completion, we believe capex intensity should decline and focus will shift towards 5G monetization. The recent Jio AirFiber (FWA) launch is the first step towards 5G monetization and with a rising subscriber base and consumer engagement on 5G, we believe there is a case to raise tariffs soon. With a nearly 15 per cent decline since the recent July 2023 peak, risk-reward seems more attractive," said Kotak.
Emkay Global Financial Services
Emkay has a buy call on RIL stock with a target price of ₹2,730.
"We keep FY24-26E earnings largely unchanged. We retain our buy on RIL on the back of steady earnings outlook and peaking-out of the current capex cycle which should entail FCF generation and debt reduction. Valuations are attractive and we maintain Sep-24E target price at ₹2,730," said Emkay.
JM Financial
JM Financial maintained a buy call on the stock with a target price of ₹2,900.
"We reiterate buy on RIL with an unchanged target price of ₹2,900 as we believe net debt concerns are overdone, and also
because RIL has industry-leading capabilities across businesses to drive a robust 14-15 per cent earnings per share (EPS) CAGR over the next three to five years," said JM Financial.
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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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