Reliance Industries Limited (RIL) shares fell nearly 4% to Rs 2403.95 in Monday’s opening trades on the BSE due to the company missing estimates for the June quarter, despite its net profit increasing 46% to Rs 17,955 crore due to strong refining margins brought on by the consumption of less expensive Russian crude and fuel exports, which boosted its dominant oil-to-chemicals sector.

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The company’s operating revenue increased by 55% to Rs 2.23 trillion from Rs 1.44 trillion. However, overall expenses increased by 51% to Rs 1.98 trillion, owing to a rise in raw material costs.

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The Mukesh Ambani-led RIL, which produces gas from an ultra-deep sea block on the country’s east coast, said it also profited from an adjustment in local gas pricing and anticipates higher local prices in October.

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Reliance Jio, the telecom segment of Reliance, reported excellent ARPU-led EBITDA growth, up 27% year on year and 4% sequentially, while Reliance Retail EBITDA increased 98% year on year (YoY) owing to operational improvement.

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“We reckon RIL’s refining shall remain subdued in the near term as GRMs plunged to USD5/bbl (Jun: USD30) amid recession fears. Exports duty levy shall further squeeze profits—about USD4 GRM impact. Upstream shall nearly match retail EBITDA by FY24E driven by high gas prices and faster-than-expected KG-D6 ramp-up. New energy (recent upgrade) plan towards green H2 shall drive valuation re-rating, besides huge synergies with the existing O2C business,” said brokerage and research firm Edelweiss while retaining a ‘Buy’ rating on the stock with a 12-month target price of Rs 3,205.