Reliance Industries gains 9% in two days post December quarter results

A bird flies past a Reliance Industries logo installed on its mart in Ahmedabad | Photo: Reuters
Shares of Reliance Industries (RIL) were quoting higher by 4.4 per cent at Rs 1,237 apiece at the fag-end of the trading session on Monday , gaining nine per cent in the past two trading days on BSE, after the company reported a better-than-expected consolidated net profit of Rs 10,251 crore in October-December quarter (Q3FY19). The company had logged profit of Rs 9,420 crore in the year-ago quarter.

Consolidated revenues came in at Rs 1,71,336 crore, a growth of 55.9 per cent as compared to Rs 109,905 crore in the corresponding period of the previous year. The company’s profit before tax, depreciation and interest increased by 20 per cent to Rs 23,801 crore over the previous year quarter.

RIL said the growth in operating profit was led by strong operating performance in petrochemicals, retail and digital services businesses. Significant volume growth and margin improvement in key product categories boosted petrochemicals segment earnings. Superior product and value proposition in retail and digital services business are driving customer traction and profitability, it added.

Meanwhile, RIL Chairman and managing director Mukesh Ambani at the Vibrant Gujarat summit on Friday said group companies Reliance Retail and Reliance Jio Infocomm would jointly launch a new e-commerce platform in the country.

Analysts at Elara Capital reiterates ‘Accumulate’ rating on RIL with price target of Rs 1,333.

“We remain positive on margin and volume expansion of petchem due to ROGC plant benefits and earnings growth from telecom (Jio) and retail,” the brokerage firm said quarterly update.

“While on one hand the earnings momentum has been strong so far in 9MFY19, with operating earnings rising by 38 per cent YoY, we do foresee a few headwinds in the months to come viz. likely extension of weaker refining and petrochemical margins on ensuing global capacity expansion, Indian rupee has more or less stabilized vs USD and also appreciated towards the end of Q3FY19, therefore is less likely to be a factor contributing to earnings growth going forward, and the capex continues relentlessly leading to growing net-debt, which currently stands at Rs 470/share (Mar'2018: Rs 365/share),” analysts at Antique Stock Broking said, retaining ‘hold’ rating on the stock with the target price of Rs 1,245 per share.

In the past one week, RIL has rallied 13 per cent, as compared to a 2 per cent rise in the S&P BSE Sensex. The stock  was 7.5 per cent away from its all-time high of Rs 1,329 touched on August 29, 2018 on the BSE in intra-day trade.

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