RIL Q4 Results Review - O2C Lifts The Quarter; Oil & Gas, Retail Aid FY24 Performance: Centrum Broking

Centrum Broking Report

During Q4 FY24, Reliance Industries Ltd.’s operating performance was single handedly benefited from strong oil-to-chemical performance supported by availability of all units, QoQ surge in gasoline cracks, and improved polymer deltas.

Reliance reported 4.6%/ 9.8% QoQ rise in consolidated Ebitda/profit after tax at Rs 425.2 billion/Rs 189.5 billion, while YoY Ebitda jumped 10.8%, PAT declined 1.8% YoY due to normalised tax rate.

During FY24 though, healthy operating performance was supported by oil & gas and retail segments, benefited from volume growth and retail space expansion respectively.

The company reported 13.8%/5.1% increase in FY24 Ebitda/PAT. KG D6 gas production volumes surged 56.8% YoY in FY24 aiding ~1.5 times surge in segment Ebitda. Retail Ebitda growth of 28.5% YoY was supported by 20.6% jump in area operated at 79.1 million square feet coupled with 36.3% YoY jump in footfalls and net addition of 796 new stores.

During FY24, Jio Platforms added 42.5 million new subscribers taking the total to 481.8 million while average revenue per user went up marginally by 1.6% YoY at Rs 181.7.

YoY capex moderated at Rs 1,318 billion versus Rs 1,420 billion with completion of 5G rollout while net debt declined to Rs 1,163 billion versus Rs 1,258 billion YoY.

Considering pressure on petchem, we have lowered our FY25E earnings estimates by 3.1% while raising FY26E earnings estimates by 4.0%. Rolling forward our valuations to FY26E, we continue to maintain Buy rating on Reliance with a SOTP based revised target price of Rs 3,481 (earlier Rs 3,299).

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