Reliance Industries Q2 Results Review - Oil-To-Chemical, E&P, Retail Propel Earnings: Dolat Capital

Dolat Capital Report

Reliance Industries Ltd.’s Ebitda was up 31% YoY & 8% QoQ to Rs 410 billion (inline with estimates), led by strong operating performance across segment. Oil-to-chemical major driver-

1. minimal impact of export duties ($0.6/barreli of oil) to gross refining margin;

2. sequential improvement in GRM, PVC deltas, and ethane cracking economics favorable.

RIL’s Ebitda was also boosted by exploration and production (sharp jump in KG gas production with higher price realisation).

Profit after tax was up 27% YoY & 9% QoQ to Rs 174 billion (4% below estimates).

Capex jumped 19% YoY due to-

1. a rise in 5G roll-out, and

2. ramp-up in retail operations.

Significant decline in capex expected on completion of 5G rollout by December 2023. Net debt declined with capital raise from Qatar Investment Authority and KKR for stake sale of retail arm. Net debt/Ebitda lower than one time.

Going forward, RIL’s Ebitda/profit after tax to clock a compound annual growth rate of 11%/13% over FY24E26E, backed by-

1. Retail’s long-term growth to continue as expansion in the network, and

2. recovery in petrochemical margin with new capacity addition.

We marginally tweaked down the earnings of FY24E/FY25E but we maintain 'Accumulate' on RIL. Thus, we have lowered our SoTP based target price to Rs 2,730 (earlier Rs 2,802) based on September 2025 estimates.

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