How to trade RIL shares after better-than-expected Q4 results

After Reliance Industries (RIL) surprised D-Street on Friday by posting a better than expected earnings for the quarter ended March 31, 2023, several top brokerages retained their bullish stance on the stock.

While JP Morgan is ‘Overweight’ on the stock, Jefferies recommends a ‘Buy’ on it. Domestic brokerages Motilal Oswal, Prabhudas Lilladher and Sharekhan also have buy ratings on RIL.

RIL reported a sharp 19% year-on-year (YoY) rise in consolidated net profit for the reporting quarter to Rs 19,299 crore. It was significantly higher than the 4% growth projected widely by analysts. The consolidated revenue for RIL grew a mere 2% on-year to Rs 2.16 lakh crore, and was a tad lower than the estimated Rs 2.22 lakh crore. However, much of this has come on the back of higher other income and lower taxes.


Meanwhile, contrary to expectations, the stock had a slow start on Monday. RIL was trading at Rs 2,353.10 on the NSE and was up by Rs 4.10 or 0.17% from the Friday closing price.

JP Morgan: Overweight | Target: Rs 2,960
Brokerage firm JP Morgan is Overweight on RIL and has a price target of Rs 2,960 as it believes the risk-to-reward ratio appears attractive now. It said that the O2C drove its better-than-expected net profit while noting that FY23 was a year of investments, mostly in consumer businesses.

Jefferies: Buy | Target: Rs 3,125
RIL beat street's expectations on 02C and Jio, Jefferies said. Jio generated healthy free cash flow (FCF) with elevated 5G capex possibly opening the next leg of growth, it said. Valuation is favourable, Jefferies added while recommending a 'Buy' for a price target of Rs 3,125.

Motilal Oswal: Buy | Target: Rs 2,800
The brokerage noted that its standalone numbers were strong while its consumer business remains steady.

Avishek Datta, Research Analyst at Prabhudas Lilladher
Reiterates Buy | Target: Rs 2,834

Sharekhan: Buy
RIL posted strong Q4FY23 performance with a 7% beat in consolidated EBITDA at Rs 38,440 crore (up 9% QoQ) led by better-than-expected standalone earnings, offsetting marginal miss in retail EBITDA. Meanwhile, Jio's performance was broadly in-line, Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas said. RIL is his top pick and the brokerage maintains a 'Buy' rating on the stock.

Kotak Institutional Securities: Buy | Target: Rs 2,800
Kotak Securities reiterated a 'BUY' on RIL with a revised target of Rs 2,800. The brokerage slashed it from an earlier target of Rs Rs 2,900. Its FY2024-25 earnings estimates are largely unchanged as lower GRM is offset by stronger petchem spreads, Kotak said. It has also kept its Enterprise Value largely unchanged. "However, with higher capex and higher effective net debt (Rs 2.9 lakh crore as of FY2023-end), we lower our FV to Rs 2,800 (from Rs 2,900)," it said.

HDFC Securities: Buy | Target: Rs 2,637
HDFC Securities recommends an 'Add' rating on RIL with a price target of Rs 2,637 premising on the recovery in the O2C businesses and EBITDA growth in the digital business, driven by improvement in ARPU, subscriber addition, and new revenue streams. It also sees potential for further value unlocking in the digital and retail businesses.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)