RELIANCE INDUSTRIES (RIL) SHARE PRICE TODAY

The share price of Reliance Industries is seen resolving above last three months base formation (₹2463-2180) signalling resumption of up move and offers fresh entry opportunity 

Stock has witnessed a steady rebound in the last two months from the key support area of ₹ 2200 being the previous major low of March 2022 and the entire up move is well channelled signalling sustained demand at elevated levels

In the smaller time frame the stock in the last 11 sessions has witnessed a shallow retracement of just 50% of its preceding 14 sessions up move and is currently witnessing buying demand after base above the 52 weeks EMA highlighting strength and positive price structure
 
We expect the stock to maintain positive bias and head towards ₹ 2710 levels in the coming months being the 80% retracement of the entire decline of Apr22-Mar23 (₹ 2856-2180)

Reliance Industries Ltd (RIL) is one of India’s largest conglomerate with a presence in oil refining & marketing, oil & gas exploration, petrochemicals, organised retail, media and digital services (Jio) making it a well diversified business entity. On a consolidated basis, at the EBITDA level in FY23, O2C and oil & gas contributed 50% while retail, digital and others contributed 12%, 34% and 4%, respectively

On the traditional businesses front, in FY23 O2C segment’s EBITDA grew 18% YoY to ₹62075 crore, profitability is expected to remain steady in near term. We expect GRMs to be subdued in the current quarter, but likely to increase in H2FY24 due to the anticipated rise in demand. Going forward, the company plans to invest more into petrochemicals business. Oil and Gas EBITDA grew 1.5x YoY to ₹13589 crore due to higher gas realisation. Going ahead, ramp up in gas production will drive growth in oil & gas segment.

FY23 was another landmark year for Reliance Retail as it grew 30% YoY to ₹ 2.6 lakh crore on a significantly large base. Retail coverage area now has crossed 65 million sq ft (up 57% YoY), which is more than 4.5x the size of the second largest retailer. Despite record number of store additions and foray into newer segments (consumer brands) the company managed to improve its RoCE profile by 250 bps YoY to 14.0% in FY23. Reliance Retail’s widespread physical store network would further enhance its omni-channel capabilities (~18% of revenues) and position it as a frontrunner to garner consistent business growth by capturing a larger pie of the Indian retail sector opportunity.

We believe that superior spectrum portfolio along with superior digital ecosystem offering lends Jio a competitive advantage even in 5G (as seen in 4G foray). With no tariff hike in sight, 5G users’ data usage trend will drive the ARPU in the near and medium term (~8.5% ARPU CAGR over FY23-25). It is aggressively expanding its broadband coverage (targeting 100 mn customer in two to three years vs. current base of ~9 mn) both through new plans and fixed wireless access, thereby aiming higher wallet share ahead. Jio also continues to build on enterprise use case both for large enterprises and small and medium businesses which will be a long-term growth catalyst.
 
We expect consolidated revenue to grow at 3% CAGR over FY23-25 to ₹1034222 crore, EBITDA to grow at ~10% CAGR over FY23-25 to ₹171724 crore and PAT to grow at 12% CAGR to ₹83608 crore, with a ROCE of 9.2% in FY25E. Long term prospects and dominant standing of Reliance Industries in each of its product & service portfolio provide comfort for long term value creation. RIL’s consumer business will be the growth driver, going ahead. The company has a strong balance sheet while its traditional business will continue to generate steady cash flows.

Refineries/Petro-products company Reliance Industries announced Q3FY24 results:

Financial Highlights:

• Consolidated Quarterly Revenue: Rs 2,48,160 crore, a 3.2% increase YoY.
• Consolidated EBITDA: Rs 44,678 crore, marking a 16.7% increase YoY, with an EBITDA margin of 18%.
• Quarterly Profit After Tax: Rs 19,641 crore, up by 10.9% YoY.
• Capital Expenditure: Investments of Rs 30,102 crore mainly in 5G rollout, retail infrastructure, and new energy business.
• Outstanding Debt: Rs 3,11,743 crore, with cash and cash equivalents at Rs 1,92,371 crore.
• Net Debt: Positioned at Rs 1,19,372 crore with a net debt to EBITDA ratio of 0.68.

Segment-wise Performance:

• Jio Platforms Quarterly Revenue: Rs 32,510 crore, up by 11.4% YoY. EBITDA increased by 11.5% to Rs 13,955 crore.
• Reliance Retail Quarterly Revenue: Rs 83,063 crore, a 22.8% increase YoY. EBITDA grew by 31.1% to Rs 6,258 crore with a margin of 8.4%.
• Oil to Chemicals (O2C) Segment: Quarterly revenue decreased by 2.4% to Rs 141,096 crore, while EBITDA marginally increased by 1.0% to Rs 14,064 crore.
• Oil and Gas Segment: Quarterly revenue is up by 50.2% at Rs 6,719 crore and a record EBITDA of Rs 5,804 crore, rising by 49.6%.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries said: “Reliance has delivered yet another quarter of robust operating and financial performance, thanks to the exceptional efforts put in by teams across its businesses.

I am happy to share that Jio has completed in India the fastest rollout of True 5G services anywhere in the world. Every city, town, and village in the country is now equipped with high-speed digital connectivity, which will usher in a new era of unparalleled digital accessibility and technology-led growth. The strong uptake of the JioBharat phone and JioAirFiber services has resulted in the continued expansion of Jio’s subscriber base, contributing to the stellar growth numbers of the digital services business.

The retail segment has also delivered an impressive financial performance with its rapidly expanding physical as well as digital footprint. Reliance Retail remains focused on enriching the customer shopping experience by adding new brands and offerings to its portfolio. Its New Commerce initiatives continue to support the growth journey of millions of small merchants through technology, generating immense societal value.

The Oil & Gas segment posted its highest-ever quarterly EBITDA. I am happy to note that KG D6 is now contributing 30% of India’s gas production, fueling its transition towards a greener and cleaner tomorrow. The O2C segment delivered resilient performance aided by operational flexibility and strong domestic demand. Staying true to its commitment to sustainability, Reliance has become the first Indian company to chemically recycle pyrolysis oil into circular polymers.

The New Energy Giga Complex is all set to be commissioned in the second half of CY24. I am confident that Reliance’s New Energy business will play a pivotal role in the global movement for adoption of cleaner fuels.”

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