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Reliance Industries Q4 earnings beat estimates: Here’s what brokerages say

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EBITDA increased by 21.8 percent year on year (YoY) to Rs 41,389 crore.

Reliance Industries will drive investors’ attention on April 24 after the company’s beat-the-street March quarter (Q4FY23) earnings declared last week.

Reliance Industries reported a net profit, attributable to the owners of the company, at Rs 19,299 crore for the March quarter of the financial year 2022-23, up 19 percent from the year-ago period. The profit beat estimates driven by a strong performance across businesses.

Gross revenue from operations of the country’s most valued company came in at Rs 2.39 lakh crore, registering a year-on-year rise of 2.8 percent.

The bottomline of the company was expected to grow in single digit year-on-year (YoY) as analysts estimated an average net profit of Rs 16,573 crore.

EBITDA increased by 21.8 percent year on year (YoY) to Rs 41,389 crore.

Also Read – Reliance Retail Q4: Net profit up 13% at Rs 2,415 crore on highest ever footfalls

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Here is what brokerages have to say about stock and the company post March quarter earnings:


Jefferies has kept ‘buy’ rating on the stock with a target of Rs 3,125 per share. The report notes that the EBITDA beat estimates, led by its O2C and Jio segments, while its retail segment was slightly lower. The report mentions that Reliance’s retail space expansion should aid a 30 percent EBITDA CAGR, but the company’s capex was elevated.

The report also notes that Jio generated healthy FCF and that its elevated 5G capex could possibly open up the next leg of growth. While recent softness in refining margin, could reverse with healthy US demand and China reopening.

The valuation is favourable, though net debt rose. However, management has allayed leverage concerns.

Morgan Stanley

The energy segment drove the Q4 EBITDA beat as chemical and refining margins recovered and gas costs declined. The report also suggests that store expansion was key to growth in retail, and the EBITDA was in line.

The profit beat of 18 percent was driven by a lower tax rate, and net debt was flat quarter-over-quarter. Notably, the company mentioned for the first time that it plans to maintain its net debt-to-EBITDA ratio below 1.

Also Read – Reliance withdraws planned merger of new energy business with itself

Motilal Oswal

The broking firm rolled its valuations to FY25. Using SOTP, they value the Refining and Petrochemical segments at 7.5x EV/EBITDA, arriving at a valuation of Rs 879/share for standalone business.

It ascribe an equity valuation of Rs 800 per share to RJio and Rs 1,354 per share to Reliance Retail, factoring in the recent stake sale. It reiterated the ‘buy’ rating with a target price of Rs 2,800.


The research firm has kept ‘overweight’ rating with a target of Rs 2,960 per share. The O2C drove a large PAT beat and that O2C and E&P are expected to drive FY24 earnings.

The capex/debt commentary is positive and welcomes the company’s comments on disciplined capital allocation and maintaining net debt/EBITDA below 1x. The report believes that this should assuage investor concerns on leverage.

However, a relentless FII sell-down remains a key near-term headwind for the stock.

Kotak Institutional Equities

Kotak Institutional Equities keeps ‘buy’ rating and a target of Rs 2,800 per share. The report notes that the Q4 consolidated EBITDA was 5 percent ahead of estimates, with the beat mainly due to O2C. Digital services fared well, while retail and E&P were marginally below expectations.

The firm suggests that a strong petrochemical recovery should cushion O2C earnings, and capex further rose to Rs 44,400 crore in Q4. However, reported net debt was flat quarter-over-quarter. It believes that with 5G capex likely peaking soon, and believes that net debt has likely peaked.


The brokerage house maintained the ‘buy’ rating on the stock with a target of Rs 2,970 per share. The Q4 consolidated PAT was ahead of estimates, helped by a notably lower-than-expected tax rate. Consolidated EBITDA was 1 percent ahead of estimates, with a 7 percent miss in retail EBITDA offset by a beat in O2C, while Jio had an in-line quarter.

It was another quarter of big expansion for retail in Q4, implying a huge 58 percent rise in retail selling space in FY23. However, for FY23, FCF dipped to negative driven by a large capex of $17 billion led by retail and telecom.
The broking firm raises the 24/25 EPS estimates by 3 percent/4 percent.

Goldman Sachs

The brokerage house has kept the ‘buy’ rating on the stock with a target of Rs 2,890 per share. The Q4 EBITDA was largely in line with expectations, while net profit was 11 percent below estimates due to higher-than-expected depreciation. The interest expense was largely in line.

Sequential earnings growth was led by the O2C segment on stronger GRMs, and falling petchem earnings turned into a tailwind with the correction in feedstock US ethane and LPG.

The firm noted that retail continued to gain market share, with grocery revenue driven by rapid store expansion.

The capex rose to $17.6 billion in FY23 but was fully funded by cash profits. The net debt to EBITDA is well below 1x in FY23.

Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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