Accumulate??????? Reliance Industries Ltd for Target Rs. 1,482 by Prabhudas Liladhar
Reliance Industries’ (RIL) consolidated EBITDA came in flat QoQ at Rs438.3bn (PLe: Rs397.1bn, BBGe: Rs433.6bn) while PAT grew 5% QoQ to Rs194.1bn (PLe: Rs166bn, BBGe: Rs184.7bn). Standalone EBITDA at Rs151.2bn was flat QoQ with sequentially week product cracks and petchem deltas. Retail EBITDA grew 14.6%YoY to Rs65.1bn. Jio ARPU increased 1.4% QoQ Rs206.2 on the back of tariff hike, with a subscriber addition of 6.1mn to 488.2mn. The stock is trading at 11.9/10.4x FY26/27E EV/EBITDA. We re-rate the stock from ‘Buy’ to ‘Accumulate’ post run-up in stock with a TP of Rs1,482 based on SoTP valuing the standalone business at 7.5x FY27 EBITDA, Jio at 15x FY27 EBITDA and Retail at 39x FY27 EBITDA.
Retail: Reliance Retail’s revenue came in at Rs786.2bn, up 16.3%YoY (down 1.2% YoY). EBITDA stood at Rs65.1bn, up 14.6% YoY (down 1.8% QoQ) with an EBITDA margin of 8.3%. PAT came in at Rs35.5bn, up 31.4% YoY (up 2.5% QoQ). Total store count stands at 19,340 with an area of 77.4mn sq ft.
Digital Services: Jio Platforms Ltd reported a revenue of Rs339.9 bn, up 3% QoQ and 17.7% YoY. EBITDA came in at Rs170.2bn, up 3% QoQ and 18.5% YoY. PAT stood at Rs70.2bn, up 2% QoQ and 25.8% YoY. Subscriber addition stood at 6.1mn QoQ with subscriber base at 488.2mn while ARPU grew 1.4% QoQ to Rs206.2/month. 191mn subscribers have transitioned to 5G and contribute ~45% of wireless data traffic.
Standalone segment: RIL’s standalone EBITDA came in at Rs151.2bn, flat QoQ (down 24.5%YoY). Product cracks declined sequentially with diesel (down 5%), atf (down 11%) and petrol down 8%. Downstream deltas too fell with PE (down 6%), PVC (down 1%) and polyester chain deltas down 4%. PAT stood at Rs112.2bn, up 28.6%QoQ (down 1%YoY) aided by lower interest cost and higher other income. O2C EBITDA (incl OI) for the quarter was Rs95.5bn, up 1% QoQ. Throughput came in at 20.3mmt, flat QoQ and sales too came in flat QoQ at 17.9mmt. Oil and Gas segment’s EBITDA at Rs50.9bn was down 8% QoQ with KG-D6 production at 23.7mmscmd. Gas realization stood at US$10.09/mmBtu. Ongoing projects include 1mmtpa polyester expansion project by 2026-207 with 3mmtpa PTA backward integration facility. 1.5mmtpa PVC project starting from caustic chlorine. On the new energy front, the company is setting up 10GW polysilicon to solar PV plant with first line of solar PV module already commissioned. Modules would be used internally to generate solar power which will be consumed internally, meaningful contribution to be seen in 2027-28. The company is also setting up a 30GWh battery manufacturing plant and a green hydrogen to green chemicals facility in Kandla. Reliance has 10 CBG plants operational with a target of 55 by 2025.
FY25 Performance: FY25 operating profit came in at Rs1654.4bn, up 2% YoY while PAT came in at Rs696.5bn, flat YoY. Capex incurred in in Q4 was Rs360.4bn while that for FY25 stood at Rs1,311bn. Net debt stands at Rs1,170.8bn.
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