Reliance Industries Q3 FY25 Results: Mixed Performance Expected
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Reliance Industries Q3 Results LIVE:
Reliance Industries Ltd reported a net profit of ₹18,540 crore for the third quarter, reflecting a 7% increase in consolidated earnings. Additionally, their operational revenue saw a 6.7% rise, reaching ₹2.43 lakh crore. Both profit and revenue exceeded analysts' predictions, which were ₹18,337 crore and ₹2.39 lakh crore, respectively.(alert-success)
Key Highlights:
Telecom Segment: Strong earnings growth is expected, driven by higher ARPU and an increasing subscriber base.
Refining Margins: Notable improvements are anticipated, contributing positively to overall performance.
Retail Segment: Moderate growth is projected, bolstered by urban consumption recovery.
Financial Projections:
EBITDA: Consolidated EBITDA is expected to improve sequentially, mainly due to strong performance in Jio and Retail segments. The O2C (oil-to-chemical) segment's EBITDA is projected to grow by 2% QoQ.
Stock Performance: Over the past six months, RIL's share price has declined by 20%. The stock is down over 8% year-on-year. However, it closed 1.82% higher at ₹1,275 per share today.
Brokerage Insights:
CLSA: RIL's stock is considered undervalued after a notable underperformance in 2024. The firm sees this as a great entry point for potential gains in 2025. The retail segment is expected to recover in the second half of 2025.
Citi: Citi upgraded RIL from "hold" to "buy" on November 25, setting a price target of ₹1,530. The brokerage highlights potential gains from future tariff hikes and efforts to enhance data pricing and monetize 5G.
JP Morgan: With a "buy" rating and a price target of ₹1,468, JP Morgan anticipates a 14% growth in consolidated EBITDA for FY26. The brokerage expects positive surprises from recovery in commodities and potential tariff hikes.
Morgan Stanley: The brokerage has given an "overweight" rating to RIL. They note that refining is recovering from cyclical challenges, while retail faces headwinds. These factors are reflected in current valuations.
Jefferies: Jefferies has given a "buy" rating with a target price of ₹1,690, expecting underperformance in 2024 due to uncertainties in medium-term growth outlook.
Segment Performance:
Telecom: Jio is expected to post strong growth, driven by tariff hikes in July. Revenue grew by 7%, EBITDA by 8%, and ARPU rose by 7.4% in the September quarter. ARPU is projected to reach ₹205.
Retail: The retail segment is expected to see a 7% increase in revenue per square foot, driven by festive season sales. However, year-on-year growth may be modest compared to the previous year.
O2C Business: The O2C business is likely to recover, with refining margins rising to $7.6 per barrel from $5.6 per barrel in Q2. Subscriber trends in Jio will be closely monitored, with predictions of a bounce-back to 485 million subscribers.
Stay tuned for more updates on Reliance Industries' Q3 FY25 results.
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