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Reliance Shares Start the Day 2% Up on Strong Q2 Earnings

Reliance Industries Ltd.’s stock rose more than 2 percent at the opening thanks to solid earnings and successful results in the company’s upstream, retail, and Jio divisions. At 9.33 am on the BSE, the stock was trading at Rs 2,302, up 1.6 percent from the previous close.

The results were expected; analysts noted stronger oil and gas profitability from increased KG D6 gas production, rapid digital service expansion, record retail earnings, and solid consumer business growth.

Despite a decline in sales from its oil-to-chemicals sector, its consolidated net profit in the second quarter of the financial year 2023–24 reached Rs 19,878 crore, up 29.7% from the previous year.

The most valuable corporation in India’s gross revenue for the quarter ending September 30, 2023, was Rs 2.55 lakh crore, up from Rs 2.52 lakh crore in the same period the previous year. In the second quarter of FY24, RIL’s profits before interest, taxes, depreciation, and amortization (EBITDA) rose by 30.2% to Rs 44,867 crore.

“In-line EBITDA and 2QF24 earnings across divisions, but earnings quality was better than expected in terms of oil to chemicals margins, growth in retail sales, and reduction in net debt, with guidance for slowdown in capex intensity in 2024,” according to Morgan Stanley’s most recent report.

Although capex is still high, management anticipates that it will peak in FY24 and then decline once the 5G deployment is finished by December 2023. Because of the money raised in Reliance Retail, RIL’s net debt dropped from Rs 1.25 lakh crore in March to Rs 1.17 lakh crore in September.

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