Moneycontrol PRO
HomeNewsBusinessMarketsAnalysts bullish on RIL after earnings meet estimates; brokerages expect growth in Jio, rebound in energy

Analysts bullish on RIL after earnings meet estimates; brokerages expect growth in Jio, rebound in energy

Reliance’s O2C (oil-to-chemicals) business delivered well in a challenging environment. Jefferies and Morgan Stanley expect a strong growth in Jio telecom unit, and a rebound in the energy segment, respectively.

July 22, 2024 / 11:44 IST
Nomura has a ‘buy’ call on Reliance Industries stock, with a price target of Rs 3,600, implying about a 16 percent upside from the last closing price.
     
     
    26 Aug, 2025 12:21
    Volume
    Todays L/H
    More

    Reliance Industries Ltd stock has received bullish calls from brokerages, buoyed by strong growth prospects of its telecom unit and a likely rebound in the energy business, following the company’s fiscal first-quarter earnings.

    Nomura has a ‘buy’ call on Reliance Industries stock, with a price target of Rs 3,600, implying about a 16 percent upside from the last closing price. Nomura analysts said Reliance’s O2C (oil-to-chemicals) business “delivered well in a challenging environment”. They also said that the operational trends remain strong for Reliance Industries, citing the rise of 20 basis points in overall margins year-on-year.

    On July 19, Reliance Industries reported an 11.5 per cent increase in revenue to Rs 2.58 lakh crore in the first quarter of the current fiscal from a year ago, bolstered by contributions across segments. Consolidated EBITDA rose 2 percent from the year-ago period to Rs 42,748 crore. However, the O2C business EBITDA declined.

    Also read: Nifty's overvaluation signals imminent correction, says Emkay

    Even so, Reliance’s O2C business results were in line with the expectations, according to Jefferies. Further, Reliance Industries said that strong contributions from consumer and upstream businesses offset the weak O2C operating environment.

    Among consumer businesses, Reliance’s Jio results too met expectations, Jefferies added. “Jio should see strong growth on the back of the tariff hike,” it said. Jio Platforms’ revenue from operations rose 12.8 percent from a year earlier to Rs 29,449 crore in the quarter ended June 30. The segment’s EBITDA increased to Rs 14,638 crore. The company said the average revenue per user (ARPU) was Rs 181.7, with a better subscriber mix.

    Jefferies and Morgan Stanley too have ‘buy’ and ‘overweight’ calls on RIL shares, with price targets of Rs 3,525 and Rs 3,540, respectively. The energy and telecom segments should see a rebound in coming quarters, Morgan Stanley said.

    Reliance’s retail business revenue grew by 6.6 percent, and EBITDA rose to Rs 5,664 crore. “The management is rationalising unprofitable parts in retail with a focus on margins,” Jefferies said. Reliance’s pivot in retail to focus on margin amid weak domestic demand stands out, Morgan Stanley said.

    Macquarie has a ‘neutral’ call on Reliance Industries stock, with a target price of Rs 2,750 per share. The company’s follow-through on capex discipline and free cash flow improvement would be positive.

    RIL’s capital expenditure for the quarter stood at Rs 28,785 crore, comfortably covered by a cash profit of Rs 33,757 crore.

    Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

    Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

    Moneycontrol News
    first published: Jul 22, 2024 11:44 am

    Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

    Subscribe to Tech Newsletters

    • On Saturdays

      Find the best of Al News in one place, specially curated for you every weekend.

    • Daily-Weekdays

      Stay on top of the latest tech trends and biggest startup news.

    Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347