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 Q1FY25 results:

Financial Highlights:

• Gross Revenue was Rs 2,57,823 crore (USD 30.9 billion), up 11.5% YoY, led by O2C on higher oil & product prices and Oil & Gas segment with strong growth in volumes. Steady growth in consumer businesses also contributed to increase in revenue.
• EBITDA increased by 2.0% YoY to Rs 42,748 crore (USD 5.1 billion). Strong contribution from Oil & Gas and consumer business offset weak O2C.
  • JPL EBITDA increased 11.6% YoY primarily on account of healthy revenue growth and operating leverage.
  • EBITDA for RRVL increased by 10.5% led by increase in footfalls and expansion of store footprint, streamlining of operations driving margin improvement.
  • O2C EBITDA was lower by 14.3% on account of lower gasoline cracks (-30%) and lower downstream chemical deltas, particularly PE (-17%), PP (-16%) and integrated polyester margin (-15%).
  • Oil and Gas segment EBITDA increased by 29.8% on account of higher volumes from KG D6.
• Depreciation increased by 15.5% YoY to Rs 13,596 crore (USD 1.6 billion) on expanded asset base across all the businesses, higher network utilization in Digital Services business, higher retail store count and ramp-up in upstream production.
• Finance Costs increased by 1.4% YoY to Rs 5,918 crore (USD 710 million) primarily due to higher interest rates.
• Tax Expenses decreased YoY to Rs 5,786 crore (USD 694 million).
• Profit after tax decreased YoY to Rs 17,448 crore (USD 2.1 billion).
• Capital Expenditure for the quarter ended June 30, 2024, was Rs 28,785 crore (USD 3.5 billion).

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries said: “Consolidated EBITDA for the quarter improved from a year ago with strong contribution from Consumer and Upstream businesses offsetting weak O2C operating environment. Reliance’s resilient operating and financial performance in this quarter underscores the strength of its diverse portfolio of businesses. Importantly, these businesses are contributing significantly to India’s growth, providing vital energy and vibrant channels for digital and physical distribution of goods and services.

The digital services business registered an impressive financial performance year-on-year, continuing its positive growth momentum. Jio’s True 5G network, covering ~85% of India’s 5G capacity, continues to attract users, while the fixed broadband offerings are witnessing increasing consumer traction both in homes and enterprises. The attractive value proposition offered by Jio is enabling more Indians to transition to next-gen data networks. This is further accelerating the digital revolution which is reshaping communications, analytics and computing, media and entertainment and commerce in India. Jio is committed to provide the best-quality state-of-the-art network at most affordable prices globally.

Retail business delivered robust financial results, as compared to last year, well supported by all consumption baskets. With fast-paced expansion of its retail footprint, Reliance Retail continues to cement its position as the preferred retailer for millions of Indians. The digital and new commerce segments are also scaling up rapidly. Reliance Retail is focused not only on providing quality products to customers, but also on enhancing overall customer experience, both during and after sales.

The deep integration and flexibility built into our O2C business model helped mitigate the impact of challenging operating environment. The business was impacted by lower fuel cracks with tepid global demand and ramp-up of new refineries. The oil and gas segment continued its growth trajectory with higher production, offsetting lower year-on-year gas price realizations.

Reliance has made significant progress on the implementation of New Energy Giga-factories. On completion, these projects will provide India a world-class, integrated green energy ecosystem which can propel the next leg of sustainable growth.”

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