Reliance Industries Q3 Results Review- Retail, Upstream Offsets Subdued O2C Performance: Yes Securities

Yes Securities Report

Reliance Industries Ltd. reported an in-line Q3 FY24, with operating profit at Rs 406.6 billion (+ 15.4% YoY; - 0.76% QoQ).

Ebitda growth was supported by upstream - oil and gas and retail segment, however the overall growth was hindered by the oil-to-chemicals segment which experienced subdued growth on account of planned maintenance and inspection shutdown, Jio continued growth with subscriber additions and higher data consumption, while retail growth came from across consumption baskets.

We believe that stability in O2C margins is crucial for sustained earnings traction. However, weaker petrochemical margins, specially amid anticipated capacity addition could hurt.

RIL capex over FY24-25E is expected to remain elevated given the ongoing investment in telecom (5G), expansion of retail infrastructure and new energy business.

Maintain 'Buy' with target price of Rs 3170/ share.

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