RIL share falls nearly 4% as Q1 earnings miss estimates
RIL's net profit increased 46% to Rs 17,955 crore in Q1 FY22-23
The company's operating revenue increased by 55% to Rs 2.23 trillion
Reliance Jio's telecom segment reported excellent ARPU-led EBITDA growth, up 27% YoY
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.
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.
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.
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.
“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.