RIL’s performance in the December quarter was largely in-line with market expectations.The EBITDA of its O2C segment dropped by 14% QoQ to Rs 140.6 billion due to maintenance in multiple units and lower cracks & deltas. However, Jio’s EBITDA increased by 1.4% QoQ to Rs 142.6 billion, and Retail EBITDA rose by 8% QoQ to Rs 62.7 billion, according to an ET report.
In Q3FY24, RIL recorded a profit after tax of Rs 19,641 crore, which was a decrease of 1.2% QoQ but an increase of 10.3% YoY. This surpassed market expectations of Rs 18,080 crore. The PAT margin for the quarter stood at 8.7% compared to 8.6% in the previous quarter.
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Morgan Stanley commented on RIL’s earnings report, stating that it sees this as a positive turning point in the company’s investment cycle and energy profitability. The brokerage firm set a target price of Rs 2,821.
Analysts anticipate that 2024 will be a significant year for RIL as the investments made in the past two years enter the monetization phase. Jefferies, which predicts a 12% EBITDA growth in FY25, has a target price of Rs 3,140, with Jio expected to contribute significantly to this growth.
Sharekhan has maintained a Buy rating on RIL, considering it a compelling long-term investment opportunity due to the strong prospects across its businesses and the potential value unlocking from its retail, digital services, and financial services portfolio.
On the other hand, Citi has downgraded RIL to a neutral rating, stating that the risk-to-reward ratio is fairly balanced. The brokerage firm has set a target price of Rs 2,910.