Reliance Industries extends fall post Q3 nos; stock dips 10% in three days

RIL lost over Rs 1-trillion market capitalisation in the past three trading days

Shares of Reliance Industries (RIL) were quoting lower for the third straight trading day, having lost over Rs 1-trillion market capitalisation (market-cap) following the announcement of October-December quarter (Q3FY21) results on January 22. 

The stock shed 2.4 per cent to Rs 1,893 on the BSE in the intra-day trade on Wednesday, down 10 per cent in the past three trading days. The combined market-cap of RIL's fully paid shares and partly paid shares declined by nearly Rs 1.4 trillion in the three days.

At 10:59 am, the fully paid RIL shares were trading 1.3 per cent lower at Rs 1,914 per share with a market-cap of Rs 12.13 trillion. Meanwhile, RIL's partly paid shares were quoting 3 per cent lower at Rs 1,044 after hitting low of Rs 1,029 in intra-day trade today. The partly paid shares market-cap stood at Rs 44,080 crore, the BSE data showed. The combined market-cap of RIL fully paid and partly paid shares hit a record high of Rs 15.63 trillion on September 16, 2020 in intra-day trade.

For Q3FY21, RIL clubbed refining and petchem into a single Oil-to-Chemicals (O2C) business (as per ongoing restructuring) and discontinued disclosures of gross refining margins (GRMs) and petchem production breakup. GRM is a key metric to analyse its oil and petrochemicals vertical, which accounts for about 70 per cent of revenue.

"The management has formalized this plan to facilitate holistic and agile decision making, bring flexibility to new strategic partnerships in the future, drive the business further toward downstream - closer to the customer and to provide sustainable and affordable energy and material solutions," Motilal Oswal Financial Services said in result update.

"As Reliance Jio’s (RJio's) growth slows, Jio Platforms, its holding company, is keen to replicate the success of wireless business in other verticals. With aggressive plans and product launches in place, Jio Platforms is creating multiple monetization opportunities in the digital space," it said.

In Q3FY21, RJio’s gross subscriber additions were steady at 25 million quarter on quarter (QoQ) but net adds were low at 5.2 million viz. lower than the 10.2/7.3 million additions during lockdown quarters of Q1/Q2. Churn for the second quarter stood at 1.63 per cent. 

As per the company, it is due to Covid-19 restrictions and other factors (impact of farm protests in our view). "In our view as Bharti and Vodafone Idea are catching-up on 4G network, Jio is facing the heat of increased competition on subscriber additions," analysts at Dolat Capital said in result update.

That apart, concerns over the Future Group deal also weighed on the RIL stock. US online retailer Amazon has filed a petition in the Delhi High Court seeking detention of Future Group founders, including CEO Kishore Biyani, and seizure of their assets as it sought to block Future Group from selling retail assets to Reliance Industries.

In the petition, Amazon sought enforcement of the Singapore arbitrator's ruling in October against its partner Future's Rs 24,713 crore deal with Reliance.

Following this, shares of Future Retail also tanked 4.98 per cent to Rs 77.25 on the BSE.