Oil-to-telecom major Reliance Industries will announce its Q4FY19 results after market hours Thursday. The Mukesh Ambani-led firm had reported 8.82 per cent on-year rise in consolidated profit at Rs 10,251 crore in Q3. Consolidated revenue from operations had increased 56.38 per cent on-year to Rs 1,60,299 crore over Rs 1,02,500 crore in the preceding quarter.
Reliance Jio, the telecom arm of RIL, had posted a profit of Rs 831 crore for the December quarter, a rise of 22.10 per cent on-quarter basis.
Here is what brokerages have to say:
Edelweiss Securities
The brokerage maintains ‘buy’ rating on the stock. Edelweiss has revised RIL’s target price by 14 per cent to Rs 1,636 on account of higher distillate cracks.
“We revise up FY21 gross refining margin (GRM) from USD13.1/bbl to USD14.8/bbl led by higher diesel cracks (IMO driven) and recovery in gasoline cracks. Consequently, we are increasing our refinery enterprise value (EV) by 14%. We also revise up Reliance Jio’s (RJIO) EV by 35% as we expect ARPU improvement to drive margin expansion”, it added.
It sees interest costs to remain flat on-quarter resulting in fall of the overall earnings by 5.4 per cent QoQ. Edelweiss sees 2.80 per cent surge in core PAT on-year basis.
Motilal Oswal
The brokerage downgrades the stock from ‘buy’ to ‘neutral’ due to limited upside as it sees weakness ahead in refining and petrochem. “Since our upgrade in Oct’17, RIL has rallied by 59%, outperforming the Nifty by 44%. The stock now trades closer to our fair value. Moreover, we expect the core business to face headwinds in 2019”, it added. Even as the telecom and retail businesses remain in a significant build-up mode, the brokerage has already factored the same in its estimates.
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