Should You Buy RIL: After the quarterly results in Mukesh Ambani’s Reliance Industries (RIL) shares, there is a big decline on 3 May. RIL’s stock has weakened by over 2 per cent to Rs 1943, while it closed at Rs 1995 on Friday. On Friday, RIL released its quarterly results, in which the company’s profit has more than doubled to Rs 14,995 crore. However, despite the profit doubling, the stock has become weak today. After the results, should you invest in RIL shares? Know what the brokerage houses are saying on this.
Profit up 129 percent
Reliance Industries’ profit in the fourth quarter increased 129 per cent year-on-year to Rs 14,995 crore. The company has gained due to low base. The company had a negative impact on the energy business due to the lockdown in the same quarter a year earlier. At the same time, the revenue of Reliance Industries increased by more than 26 percent to Rs 1.49 lakh crore in the fourth quarter. RIL’s telecom arm Jio reported a 47.5 per cent increase in profit in the fourth quarter to Rs 3508 crore. The net revenue of the retail business increased by 21 per cent on an annual basis to Rs 41300 crore.
Decline in EBITDA
RIL’s EBITDA declined on an annual basis in the fourth quarter, while Jio’s EBITDA increased 6 per cent year-on-year. Retail business EBITDA has grown by 42 per cent on an annual basis. Jio’s revenue has decreased by 6 percent. At the same time, the removal of IUC charge has also reduced the ARPU by 9% and it has been Rs 138.2 per month. The company had 42.6 crore customers in the fourth quarter of FY 2021. During this period, 31 million new customers have been added with the company.
Brokerage House’s advice after the results
Brokerage house Motilal Oswal has advised to invest in Reliance Industries shares and has set a target of Rs 2195. While brokerage house Morgan Stanley has given an overweight rating on RIL and has set a target of Rs 2262. The brokerage house says that upcycling in refining and patchem will boost investor confidence. CAGR growth of 23 per cent could be seen in profits in FY20-23. Brokerage house Jefferies has also set a target of Rs 2580, recommending a buy in RIL.
However JP Morgan has given a neutral rating on RIL and has set a target of Rs 2055. At the same time, Credit Suisse has also given a neutral rating on RIL and has set the target of the stock at Rs 1930. However, the report says that RIL has seen strong recovery in retail and O2C.
(Note: We have given information here based on Reliance Industries’ quarterly results and brokerage house report. Considering the risk of the market, take the opinion of the experts before investing.)