RIL share price: After listless show so far in CY24, is the tide turning for the conglomerate?

The stock price of the oil-to-telecom conglomerate has gained 8% in the past 12 months and has fallen 12% in the past six months. 

However, of late, a couple of global brokerages have placed faith in the Mukesh Ambani-led company. 

On Monday, Citi, as per news reports, said in a note that it expects an improvement in RIL's refining margins, given China’s reduced export competitiveness. 

Jio remains well-positioned to benefit not just from future tariff hikes but also from any moves to improve data pricing and/or better monetise 5G, the global brokerage added. 

“We forecast a 3-year (FY24-27E) consolidated EBITDA CAGR of 11% for RIL. While this is a decline from the 18% CAGR delivered over the last 9 years (FY15-24), this is well reflected in valuations, in our view, with the stock now trading at 10x EV/Ebitda on a 1-year forward basis, in line with its long-term mean,” it added.

However, it added that softness in Reliance Retail may continue for another couple of quarters. 

A day earlier, JP Morgan also highlighted that Reliance Retail has been affected by a general retail slowdown and specific company restructuring.

On Tuesday, Jefferies said in its note that it expects RIL's Singapore GRM to improve YoY in CY25.

It added that Jio's strong traction in-home broadband subscription additions position the company well for 5G monetisation. 

It also said that it sees the likelihood of a public listing of Jio in CY25, as per news reports.

RIL Q2 FY 25 Results

Its consolidated net profit fell to ₹16,563 crore or ₹24.48 per share in July-September - the second quarter of the current fiscal - compared to ₹17,394 crore or ₹25.71 a share in the same period a year back, according to a company statement.

While retail and telecom businesses posted steady performance, the oil-to-chemical (O2C) business, which is made up of twin oil refineries at Jamnagar in Gujarat and petrochemical units saw margins shrink on global oversupply.

The O2C performance was hurt by a global oversupply due to China flooding the market with petroleum products it made from refining cheap Russian crude oil. This led to a fall in product margins.

The financial performance was also impacted by finance costs rising by 5% to ₹6,017 crore, primarily due to higher debt.

Also, depreciation rose by 2.3%.