Reliance Shares Jump As Q2-Print Impresses Investors, Analysts

Reliance’s share price was trading higher on Monday morning to continue making gains for the second straight session.

What Happened: Reliance reported results for the September quarter late last week. The conglomerate’s consolidated net profit reached ₹19,878 crore, reflecting an impressive 29.7% increase compared to the previous year, despite a decrease in revenue from its oil-to-chemicals business.

Gross revenue from operations for the Mukesh Ambani-led conglomerate was recorded at ₹2.55 lakh crore in the quarter ending on September 30, compared to ₹2.52 lakh crore in the previous year.

During the quarter, Reliance reported a 27% jump in consolidated net profit (attributable to the owners of the company), amounting to ₹17,394 crore. The top and bottom lines were mostly in line with consensus estimates.

Reliance’s oil-to-chemicals (O2C) business, its largest segment, reported a revenue of ₹1.47 lakh crore, marking a decline of 7.3%. This was primarily due to a sharp 14% year-on-year drop in crude oil prices, leading to lower price realization for products in this segment.

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Jio Platforms’ profit for the July-September period reached ₹5,297 crore, marking a 12% increase. The telecom and streaming business segment’s revenue from operations in the quarter amounted to ₹31,537 crore, compared to ₹28,506 crore in the same period last year. The average revenue per user (ARPU) for Jio improved by 2.5% year-on-year, reaching ₹181.7 per user per month.

Reliance Retail also posted a net profit of ₹2,790 crore in the quarter, reflecting a 21% increase. Revenue from operations for the quarter amounted to ₹77,148 crore, with a substantial growth of 18.8% year-on-year. The quarter saw 260 million store footfalls, compared to 249 million in the previous quarter.

Analyst Reactions: Analysts were mostly impressed by the company’s performance. Jefferies maintained its “buy” rating for the stock raising the price target to ₹3,000 from ₹2,975. Nomura also maintained its “buy” rating for the stock with a price target of ₹2,925. The brokerage said that the company’s September quarter results were in line and all the segments showcased healthy growth. Macquarie upgraded the stock from “underperform” to “neutral” hiking the target price to ₹2,200 from ₹2,100.

Price Action: Reliance’s share price was up 1.25% to trade at ₹2,294.20 at open on Monday.

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