The profit beat the Street estimates of Rs 18,337 crore, while revenue was also higher than the poll expectations of Rs 2.39 lakh crore.
The oil-to-telecom conglomerate’s operating profit, measured as EBITDA, surged nearly 8% to Rs 48,003 crore in the reporting third quarter. Margins expanded 10 basis points to 18%.
The strong growth during the quarter was led by healthy show from all the key businesses of Jio, Retail and particularly the O2C (oil-to-chemicals, where refining margins recovered sequentially.
Jio Platforms
Jio Platforms, the company’s digital arm, registered 26% YoY growth in its net profit at Rs 6,861 crore, while revenues improved 19% YoY to Rs 38,750 crore.
The strong operating revenue growth was due to partial impact of tariff hike, ramp up in pace of home connect and accelerating non-connectivity digital services businesses.
EBITDA for the business was up nearly 19% YoY in the third quarter to Rs 16,585 crore, but margins declined 30 bps to 50.1%.
ARPU (Average revenue per user) increased further to Rs 203.3, but was slightly below analyst expectations of Rs 204, with sustained impact of tariff hike and better subscriber mix.
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Should you buy, sell, or hold RIL’s stock? Here’s what analysts say:
Nuvama
Nuvama maintained a ‘Buy’ rating on Reliance with a target price of Rs 1673.
The company achieved its highest-ever EBITDA of Rs 43,800 crore, surpassing the Q3FY25 estimate, driven by strong performance across all segments. The Oil to Chemicals (O2C) segment, contributing 61% of the attributable PAT, saw a 16% QoQ increase in EBITDA (+2% YoY) due to higher fuel cracks and polymer deltas.
Additionally, Reliance’s New Energy segment aims to match the profitability of the O2C segment within 5–7 years, and there is strong growth visibility with the expected recovery in petrochemical margins.
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IIFL Securities
IIFL Securities maintained a ‘Buy’ rating on Reliance, with a target price of Rs 1729.
The Retail and O2C segments have shown positive surprises, with expectations of 1% PAT growth for Reliance in FY25 and a 15% CAGR over FY25-27. The progress of the potential listing of JIO Platforms will be closely monitored.
There are no incremental updates on the New Energy business. The O2C segment is projected to see a capex of Rs 400-500 billion through 2027 as Reliance enhances its PVC capacity by 200%. Additionally, the company plans to increase its ethane pipeline capacity by 50% and add one-third MMT capacity for polyester/PTA.
Elara Capital
Elara Capital reiterated its ‘Accumulate’ rating on Reliance, adjusting the target price to Rs 1493 from Rs 1632.
The FY27E EPS is raised by 2% due to a weaker USD-INR at Rs 87.0, up from Rs 83.0. The target price has been reduced because of lower EBITDA from the Retail segment.
For Digital Services, the FY27E EV/EBITDA is pared to 15.5x due to saturating subscriber growth. In the Retail sector, lower revenue and EBITDA CAGRs of 6% (down from 8%) and 9% (down from 11%) are expected through FY24-27E, with a focus on improving efficiency.
DAM Capital
DAM Capital maintained its ‘Buy’ rating on Reliance, with an updated target price of Rs 1550, up from Rs 1521.
After a challenging first half of FY25, Reliance has shown a decent recovery, particularly in the Retail segment, which has bounced back following the recent recalibration of stores. The Oil to Chemicals (O2C) segment remains steady despite a challenging environment.
Jio continues to grow in both tariff and subscribers, with a forecasted EBITDA growth of approximately 12% for FY25-27. Currently, Reliance is trading at a forward multiple of around 10x EV/EBITDA, compared to its historical average of about 12x.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
