A Reliance Industries Ltd. sign is lit at night at a gas station in Mumbai, India. (Photographer: Abhijit Bhatlekar/Bloomberg News)

Q4 Results: What Analysts Have To Say About Reliance Industries’ Performance

Most analysts remain upbeat on Reliance Industries Ltd. as they expect the demerger of its non-core telecom assets to help India’s most valuable company pare debt.

The oil-to-telecom conglomerate led by India’s richest man announced the valuation details and structure of the hived off tower and fibre assets at its analyst meet after the fourth-quarter earnings. The demerger, according to brokerages such as Prabhudas Lilladher and IDBI Capital, will help the company to deleverage its balance sheet and turn Reliance Jio Infocomm Ltd. into an asset-light entity.

But that’s also expected to increase the operating cost of Reliance Jio as it will now have to pay to use the tower and fibre assets. Still, the company isn’t looking at increasing its tariffs, Motilal Oswal said. Reliance Jio will continue to focus on subscribers over average revenue per user.

Analysts maintained their stance on Reliance Industries even as its profit fell for the first time in more than four years on lower gross refining and petrochemicals margin. But the consolidated earnings, according to research notes of brokerages, beat estimates due to higher other income and lower tax expense.

Here’s what brokerages have to say about Reliance Industries:


  • Maintains ‘Buy’ with a target price of Rs 1,400 per share, implying a potential upside of slightly more than a percent from the current market price.
  • In line with estimates but weak fourth quarter; transfer of Reliance Jio’s assets to increase cost from the first quarter of the ongoing financial year.
  • Ramp-up of petcoke gasification over the next few months and the International Maritime Organization’s new standards to cut pollutants are positive.
  • Pace of growth of Reliance Jio and the retail segment remains strong.

Antique Broking

  • Maintains ‘Hold’ with a target price of Rs 1,245 per share, implying a potential downside of about 10 percent.
  • Consolidated fourth quarter net profit ahead on higher other income and lower tax incidence.
  • The refining segment impacted by weaker margin, lower throughput.
  • Reliance Jio’s average revenue per user fell on addition of Jiophone subscribers.

Motilal Oswal

  • Maintains ‘Neutral’ with a target price of Rs 1,431 per share, implying a potential upside of 3.4 percent.
  • Better petchem business offsets poor refining performance.
  • Reliance Jio’s growth slows down; equity value reduced by 10 percent due to higher debt.
  • No thoughts on average revenue per user increase; focus to grow subscribers.


  • Maintains ‘Buy’ with a target price of Rs 1,500 per share, implying a potential upside of 8.5 percent.
  • Stable quarter.
  • Investors need clarity on impact of Reliance Jio’s recurring outflow to tower and fibre special purpose vehicle.

Prabhudas Lilladher

  • Maintains ‘Accumulate’ with a target price of Rs 1,406 per share, implying a potential upside of 1.7 percent.
  • Lower refining throughput, weak gross refining margin and lower polymer margin drag standalone profitability.
  • Reliance Jio’s growth moderates; deleveraging to create an asset-light model.
  • Profitability to lift from higher GRMs and commercialisation of petcoke gasification project.

IDBI Capital

  • Downgrades to ‘Hold’ from ‘Buy’ but hikes target price to Rs 1,400 from Rs 1,326 per share.
  • Downgrade due to price appreciation and limited upside; hike in target price to reflect FY21 estimates.
  • Expects higher operating expenditure due to demerger which will be offset by lower depreciation and interest.

Credit Suisse

  • Maintains ‘Neutral’ with a target price of Rs 1,425 per share, implying a potential upside of 3 percent.
  • Fourth quarter earnings beat estimates due to strong retail.
  • The retail segment benefitted from strong same-store-sales growth.
  • Higher consolidated capex led to net debt expansion.

Here’s a review of RIL’s Q4 performance: