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Shares of Reliance Industries Ltd (RIL) plunged over 3% on the BSE in Monday's opening deals on missing estimates in June-quarter even as its net profit jumped 46% to 17,955 crore  on the back of robust refining margins due to intake of cheaper Russian crude and fuel exports buoyed its dominant oil-to-chemicals business. 

India's top valued company's revenue from operations surged 55% to 2.23 trillion from 1.44 trillion. However, total expenses surged 51% to 1.98 trillion, led by an increase in raw material costs. 

Mukesh Ambani-led RIL, which produces gas from an ultra deep water block in the country's east coast, said it also benefited from a revision in local gas prices and expects higher local prices from October.

Telecom arm Reliance Jio posted healthy ARPU-led EBITDA growth – up 27% from the year-ago quarter and 4% on a sequential basis, while Reliance Retail EBITDA jumped 98% year-on-year (YoY) due to the recovery in operations.

What brokerages recommend on RIL shares post Q1 results

“We reckon RIL’s refining shall remain subdued in the near term as GRMs plunged to USD5/bbl (Jun: USD30) amid recession fears. Exports duty levy shall further squeeze profits—about USD4 GRM impact. Upstream shall nearly match retail EBITDA by FY24E driven by high gas prices and faster-than-expected KG-D6 ramp-up. New energy (recent upgrade) plan towards green H2 shall drive valuation re-rating, besides huge synergies with the existing O2C business," said brokerage and research firm Edelweiss while retaining ‘Buy' rating on the stock with 12-month target price of 3,205. 

“While Q1 numbers were a miss and Q2 GRMs are also down, we expect them to stabilize at more normative levels and upcoming winter to provide support. Consumer businesses’ outlook is steady, though we await updates on 5G. Maintain Buy and any price correction would be a good entry point with target price of 2,750," said another brokerage Emkay.

Another domestic brokerage Motilal Oswal has also reiterated Buy tag on Reliance Industries shares with target price of 2,785 as it underscore new growth opportunities in the Digital space and steady market share gains.

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

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