Reliance Industries Ltd. (RIL) released earnings for the March quarter that were essentially in line, beating Ebitda. Retail Ebitda underperformed among the segments due to reduced sales, but stronger O2C on increased utilisation and improved refining more than made up for it. Analysts raised their predictions for FY25 and FY26 earnings, which in turn led to a 10% increase in target prices on RIL following quarterly reports. They added that Jio and Upstream's statistics were in line.
"Capex run-rate decreased significantly in Q4, but we think new energy and petchem will continue to generate Rs 1.2 million annually. Given the competitive environment, we are optimistic about Jio pricing increases, whereas Oil & Gas and Retail should stay the same. We increase SOTP-based target price by 8% to Rs 3,200/share and FY25–26E earnings by 2–5% each on the strength of Jio's increased profitability (thanks to ARPUs) and roll-over to Mar–26E. Emkay Global stated, "RIL is well-positioned with consistent profitability and positive FCFF; fresh energy should also begin.
Despite the current weakness in refining margins, Kotak stated that it anticipates future improvement. Petchem shows a slower rate of healing. "E&P's earnings, in our opinion, have peaked.Despite a poor fourth quarter for retail, we anticipate growth to come up due to robust area expansions. Raising tariffs is still a major driver of R-Jio. Keep ADD at Rs 3,200, the revised fair value, it stated.
The petrochemical cycle is expected to strengthen in FY26, according to Antique Stock Broking. It views increase in retail and telecom subscriber base as the main drivers of RIL's profits growth, combined with a notable improvement in ARPU due to price rises.
"New energy commissioning in FY25 would likely provide the groundwork for the following wave of capital expenditures. With a little rise in O2C forecasts and a modification to our telecom multiple, we retain our BUY rating with a revised SoTP target of Rs 3,227 (formerly Rs 3,005)," the statement read.
UBS rates the stock at Rs 3,420. Jefferies recommended Rs3,380 as the goal. The stock has a target price of Rs3,250 set by BofA Securities. Morgan Stanley and Bernstein value the shares at Rs. 3,046 and Rs. 3,160, respectively.
An equity valuation of Rs 810 per share was assigned by Motilal Oswal to Reliance Jio, Rs 1,593 per share to Reliance Retail, and Rs 37 per share to the new energy business. It recommended a 'BUY' on RIL with a Rs 3,245 target price.
In addition to assisting traditional business, RIL's New Energy deployment will spur its next phase of expansion. We are increasing our aim by 10% to Rs 3,500 and increasing FY26E Ebitda by 8% (good outlook)," stated Nuvama.
