RIL slips nearly 2% after June quarter result; here's what brokerages say

Shares of Mukesh Ambani-controlled Reliance Industries (RIL) slipped nearly 2 per cent on Friday, a day after the company reported its June quarter numbers for the fiscal year 2020-21 (Q1FY21).

At 09:39 am, the stock was trading over 1.63 per cent lower at Rs 2,074 on the BSE. In comparison, the S&P BSE Sensex was trading 32 points or 0.09 per cent higher at 37,768 levels. During the session, the stock hit a low of Rs 2,070.70 against Thursday's close of 2,108.65.

RIL's shares had hit an all-time high of Rs 2,198.70 on July 27 whereas its 52-week low stands at Rs 867.82, touched on March 23, 2020.

For the April-June period, RIL reported a profit before tax (PBT) of Rs 8,542 crore against Rs 14,366 crore reported during the same quarter last year. The company's net profit, however, rose about 31 per cent to Rs 13,233 crore against Rs 10,104 crore in the same quarter last year. CLICK TO READ FULL REPORT

Net sales in the June quarter fell 44 per cent to Rs 88,253 crore against Rs 1.57 trillion in the same quarter a year ago.

Further, the company's telecom arm, Reliance Jio, reported a pre-tax profit of Rs 3,375 crore in the April to June quarter of financial year 2020-21, driven by 33.7 per cent growth in revenue. In the same period last year, the operator had reported pre-tax profit of Rs 1,369 crore, showing a jump of almost 147 per cent.

Analysts at Prabhudas Lilladher, in a result review note, said, "RIL with its stated intention to monetise and forge global partnership across businesses, is well-positioned to incubate new business and pursue inorganic opportunities given its liquid balance sheet. Despite the sharp run-up in stock prices (+140 per cent in the last 4 months), we believe positive news flow on global partnerships or stake sale is likely to keep valuations at an elevated level." The brokerage has maintained a "BUY" rating on the stock with a revised target price of Rs 2,170 (Rs 1,828 earlier).

Sharekhan, too, has a "BUY" rating on RIL stock with the target price of Rs 2,400. The brokerage notes that the recent fund-raising has strengthened RIL’s balance sheet (become net debt-free) and potential monetisation of the stake in retail business and likely listing of Jio could create long-term value for investors.