Updated: October 25, 2021 12:40:12 pm
Shares of market heavyweight Reliance Industries (RIL) rose nearly 3 per cent in the opening deals on Monday after the company reported a sharp 46 per cent rise in consolidated net profit at Rs 15,479 crore for the September quarter (Q2) of the financial year 2021-22 (FY22). However, within a few minutes, the stock erased its gains and slipped over 2 per cent.
The stock of the oil-to-telecom behemoth fell as much as 2.17 per cent to Rs 2,570.10 apice on the BSE while on the National Stock Exchange (NSE), it fell 2.18 per cent to Rs 2,570.00 per share. Earlier in the day, it had jumped 2.74 per cent to Rs 2,699 on BSE while on NSE, it gained 2 per cent to Rs 2,680.
At 11:24 am, it was trading at Rs 2,622.55, down 0.17 per cent on the BSE while on NSE, it was at Rs 2,622.75, down 0.18 per cent.
Over 45.80 lakh shares were traded on NSE while nearly 2.80 lakh shares exchanged hands on the BSE, data from the respective stock exchanges showed.
After the market hours on Friday, RIL had announced a 46 per cent rise in consolidated net profit at Rs 15,479 crore for the Q2 of FY22 as against Rs 10,602 crore in the same period of last year. The company’s gross revenue for the period was Rs 1,91,532 crore, 49.2 per cent above Rs 1,28,385 crore a year ago.
Jio Platforms posted a 23.5 per cent rise in net profit at Rs 3,728 crore for the quarter. Jio’s gross revenue for the quarter was Rs 23,222 crore, higher by 15.2 per cent. Reliance Retail achieved a gross revenue of Rs 45,426 crore for the second quarter, a growth of 10.5 per cent year-on-year and higher than pre-Covid period. Its net profit for the quarter was Rs 1,695 crore, 74.2 per cent higher.
“All our businesses reflect growth over pre-Covid levels. Our operational and financial performance reflects sharp recovery in the retail segment and sustained growth in oil-to-chemicals (O2C) and digital services business. Our O2C business benefited from sharp recovery in demand across products and higher transportation fuel margins,” said RIL Chairman & MD Mukesh Ambani.
Motilal Oswal Institutional Equities in its Morning India report gave a “Buy” rating to the stock at a price of Rs 2,627 and a target price of Rs 2,900.
“Using SoTP, we value the Refining and Petrochemical segment at 7.5x FY24E EV/EBITDA to arrive at a valuation of Rs 775/share for the standalone entity. We ascribe an equity valuation of Rs 880/share to RJio and Rs 1,200/share to Reliance Retail, factoring in the recent stake sale. Our higher EV/EBITDA multiple of 33x/19x for Retail/Digital Services underscores new growth opportunities in the Digital space, along with the rationalization of tariffs in RJio. We reiterate our Buy rating with a TP of Rs 2,900/share,” the brokerage report said.
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