had reported 17.9% year on year (yoy) growth in consolidated net profit of Rs 94.59 billion in first (April-June) quarter of FY19 (Q1FY19). During the June quarter, its consolidated revenue grew 56.5% yoy at Rs 1,417 billion.
Analysts at KRChoksey Shares and Securities believe that RIL’s mega investments will hereby begin to deliver by way of improved margins and boosted cash flows. The refinery off-gas cracker (ROGC) cracker has been fully stabilized which will help to produce high value polymer derivatives from low-cost fossil fuels resulting in lower feed stock costs for the company.
In addition, the pet coke gasification project complimented by increased crude prices will further add value to the profitability and margins. As for the telecom segment, the brokerage firm expects superior performance on the back of increasing market share, strong subscriber growth and the launch of its broadband services, it added.
“We have revised our estimates taking into account the stabilization of the gasification project, sustainability of middle distillate cracks and its subsequent effect on the GRMs. We expect revenues to grow at a CAGR of 16.3% over FY18-20E and PAT to grow at a CAGR of 23.2% over FY18-20E,” analysts said with ‘buy’ recommendation on stock and target price of Rs 1,442 per share.
“We have marginally increased our earnings estimates and increased our multiple for the retail business, and this leads to a price target increase of to Rs 1,100 vs Rs 1,050. In our view the key call is how much can RIL’s consumer businesses re-rate from here,” the brokerage firm JP Morgan in recent note.
“Retail+JIO account for around 24% of our EBITDA estimate but 46% of our enterprise value (EV). Peer group valuations are sharply higher, and in our view the key upside risk to our PT essentially comes from how much the consumer businesses can re-rate from here. Key downside is continued weakness in refining and a pullback in cyclically high polyester margins,” it added.
Meanwhile, RIL today surpassed India’s biggest software services firm Tata Consultancy Services (TCS) to regain the country’s most valued firm in terms of market capitalization. At 01:51 pm; RIL has a market cap of Rs 7.64 trillion, the BSE
data show. TCS, which trading 0.3% higher at Rs 1,974, was valued at Rs 7.56 trillion.