RIL share price will react to the Q4 numbers on Monday. Should You Buy/Sell?

Manish Chowdhary, head of research at Stocksbox, said,Reliance Industries delivered strong numbers on the back of good operating performance, with growth momentum across all businesses.”

In Q4FY23, Mukesh Ambani-backed RIL posted highest ever quarterly profit driven by strong operating performance of core O2C business, optimized feedstock cost and ancillary product margins. Steady growth was also seen in the retail and telecommunication arm.

RIL filed PAT 19,299 crore up 19.11% YoY and 22.21% QoQ. came in EBITDA 41,389 crore up 21.8% YoY. O2C business records record EBITDA Rs 16,293 crore Q4FY23 an increase of 14.4%. However, the consolidated revenue stood at 211,887 crore up 2.1% YoY but down 1.9% sequentially.

Further, Choudhary said, “The company’s telecom business was able to deliver record revenue and EBITDA, owing to the full impact of tariff hike, ramp-up of wireline services and continued subscriber growth for mobility services. It launched True 5G services.” Which are. Now available across 2300 cities and towns in India. Another quarter of strong growth in its retail venture led by growth in grocery, consumer electronics and fashion & lifestyle.”

However, he also added, “Their O2C trade revenue declined due to a sharp reduction in crude oil prices and lower price realization of downstream products. However, the O2C segment posted its highest-ever operational performance despite global uncertainties and disruption in commodity trade flows.” Recorded profit.”

He also pointed out that the implementation of RIL’s New Energy Giga Factories at Jamnagar is making significant progress as a significant step in the green energy sector.

Meanwhile, Morgan Stanley said in its note, “Total earnings were 7% above consensus estimates adjusting for the lower tax rate that normalized in the first half of F23 due to higher tax rates.” The rate was 21.3%, slightly higher due to lower tax credits. Internal cash profits for the past two years have funded the past two years’ $30 billion in investment (ex-spectrum). Management took the weak Re/USD and Highlighted working capital, which led to higher net debt. Mentioned for the first time for RIL that plans to maintain net debt/EBITDA below 1, despite upcoming investments.”

Stocksbox’s expert believes that RIL is ticking the right boxes and becoming a threat to established players in the sectors it has recently entered. The agile foundation and changing dynamics of the company’s overall business make it attractive as a long-term play.

As per Stanley’s note, RIL’s net debt was flat quarter-on-quarter at $13 billion with capex run rate rising to $5.4 billion for the March-23 quarter. RIL invests $17 billion in capex – similar to previous capex cycle peak. Spectrum liabilities stood at $15 billion, with CWIP rising to $14.3 billion. Foreign ownership was close to a 7-year low at ~24% in Mar-23.

On stock price, Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas said, “Continued strong traction in its consumer-focused business to drive strong earnings growth for RIL and potential IPO catalyst for Jio/Retail.” RIL is our top pick. And we have a Buy rating on the stock.”

In addition, Avishek Dutta – Research Analyst, Prabhudas Lilladher has a ‘Buy’ recommendation for the target price of 2,834 on RIL.

RIL announced its fourth quarter results after the market closed on Friday last week. Hence, the full impact of the financial results will be seen on the share price on Monday. On BSE, RIL stock ended 2,348.90, up marginally from the previous session.

Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.