RIL Q4 results: What should investors do when RIL stock price opens on Monday?

The Mukesh Ambani-backed RIL garnered the highest ever quarterly profits driven by strong operating performance of mainstay O2C business, optimised feedstock cost, and supportive product margins. The retail and telecom arm also witnessed stable growth.

RIL announced its Q4 results after market hours on Friday. Hence, the stock price will fully witness the impact of the financial results on Monday next week. 

On BSE, RIL stock finished at ₹2,348.90 apiece marginally up from Thursday’s closing price of ₹2,345.70.

RIL Q4 Results Quote by Parul Rao, Research Analyst, SAMCO Securities said, “Reliance Industries seems to be hitting all the right nerves across its businesses during the January-March period ie. Q4FY ‘23. Despite being topline flat YoY, the company posted its highest-ever quarterly profits of ₹19,299 crores, a jump of 19% YoY. The consumer-facing business took a front seat and drove the earnings.”

In Q4FY23, Ambani’s oil-to-energy empire registered a PAT of ₹19,299 crore up by 19.11% YoY and 22.21% QoQ. EBITDA came in at ₹41,389 crore up by 21.8% YoY. O2C business reported a record EBITDA of ₹16,293 crore in Q4FY23 surging by 14.4%.

However, in Q4FY23, consolidated revenue stood at ₹211,887 crore up by 2.1% YoY but lower by 1.9% sequentially. Income from the value of sales and services came in at ₹239,082 crore up by 2.8% YoY aided by continued growth momentum in consumer businesses. Also, digital services and retail segments posted a growth of 15.4% YoY and 19.4% YoY respectively.

On the performance, Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas cited that the Q4 consolidated PAT was above their estimates given the robust O2C earnings and lower tax rate of 11.6% offsetting rise in interest/depreciation cost and lower other income.

Also, Bora added, “RIL posted strong Q4FY23 performance with 7% beat in consolidated EBITDA at Rs38,440 crore (up 9% q-o-q) led by better-than-expected standalone earnings offsetting marginal miss in retail EBITDA while Jio performance was broadly in-line. Standalone EBITDA increased sharply by 20% q-o-q to Rs18,070 crore (10% above our estimate) led by strong O2C EBITDA of Rs14818 crore (up 22% q-o-q) reflecting benefit of higher gasoline cracks and feedstock optimization. Jio EBITDA was in-line with a 2% q-o-q increase to Rs12,767 crore with steady ARPU of Rs179 and net subscriber addition of 6.4 mn q-o-q. Retail EBITDA was tad lower than expectation at Rs4769 crore (up 2.4% q-o-q) due to slower revenue growth of 2.4% while margin remained stable q-o-q at 7.7%.”

Furthermore, Bora said, “The company maintains a positive outlook across the O2C chain-driven business. The Oil & Gas segment is poised to be a source of significant value and sustained earnings growth in the coming years. Reliance Jio is expected to continue its leadership position with a healthy subscriber base and new offerings.”

Accordingly, going ahead, Samco’s analyst said, “The retail segment is positioned for strong growth as the company has been bolstering its portfolio through acquisitions and expansion. The listing of Jio Financial services will unlock new opportunities for investors.”

On the valuation, Sharekhan’s analyst said, “Continued strong traction in its consumer-centric business to drive strong earnings growth for RIL and likely IPO for Jio/Retail remains catalyst. RIL is our top pick and we have a Buy rating on the stock.”

Avishek Datta – Research Analyst, Prabhudas Lilladher has also given a ‘Buy’ rating on RIL for a target price of ₹2,834 apiece ahead.

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