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Reliance Share Price Details
Share price of Reliance Industries fell over half a per cent on Monday, leaving the Nifty, Sensex in deep red, down nearly 1 per cent in morning trade. RIL share price rose 0.26 per cent despite the S&P BSE Sensex falling over 400 points or 0.50% to leave 59,250; And the NSE Nifty 50 index fell over 150 points or 0.48% to 17,600. However, the stock soon fell into the red mark. Share price of RIL closed in the red at Rs 2,606.7, down 0.3 per cent. Reliance shares were trading 0.77% lower at Rs 2,593 on the NSE. Analysts at ICICI Securities maintained their positive outlook on the stock and reiterated ‘Add’ rating with a target price of Rs 2,805 per share.
“We are strongly optimistic about the prospects of RIL’s green energy business as well as strong momentum in consumer business segments over the next 12-18 months. However, we believe that the current valuation multipliers are in a ‘zero things can go wrong’ scenario, which we do not find rational,” said analysts in the ICICI Direct report. Oil-to-telecom for the last three years The principal has shown a steady decline in the key return ratio. He added that despite strong earnings, the dividend payout has also been low. “From an investment perspective, muted return ratios, with high multiples, which cover all the risks,” the brokerage report said. (lower margins, green energy execution / scale / deadlines shorter), should give some pause.”
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“Our valuation assigns mid-upcycle EV/EBITDA multiples to OTC, leading multiples for RJio, strong EV/EBITDA multiples for retail and 1.5x capital employed in the ‘New Energy’ segment. It offers a fair value of Rs 2,805 per share, which is about 7.3% above the CMP. We maintain our ADD rating on the stock,” the brokerage said. According to the report, strong OTC margins, lower capex, strong ARPU growth at RJio and rapid implementation of green energy plans are major upside risks for RIL stock.
Highlights of Reliance’s Annual Report
Earnings mix continues to change: The share of consumer businesses (retail + digital) in consolidated revenue and EBIT has increased from only 15 and 10% in FY18 to 26 and 42%, respectively, in FY22. The change was driven by a physical change in the size and scale of the digital services and retail sectors. Digital services revenue grew by 7.6x and retail revenue by 2.8x in 5 years. EBIT for retail and digital services grew by 4.9x and 7.9x respectively.
Capex stays ahead of estimates: There was optimism around material FCF production from RIL in FY2012-FY24, after completion of downstream expansion and mobility capex by FY2011. However, the run-rate of capital expenditure has been well ahead of the earlier estimates of Rs 50,000 crore-60,000 crore for FY 2011-FY 2012, averaging over Rs 1 lakh crore and Rs 1.45 lakh crore for FY 2012. Touching an all-time high of Rs. The capex includes interest of Rs 4,870 crore capitalized for the year, as against Rs 4,590 crore capitalized in FY21. Also Read: Nifty May Consolidate In 18000-17500 Range This F&O Expiry Week, Use Dips To Buy Bank Nifty; Buy SBI, Titan
Gross borrowing jumps 13% year-on-year: Despite strong profitability and inflows from strategic sale and rights issue in FY2011-FY2012, gross long-term debt has grown by Rs 41,400 crore annually to Rs 3.6 lakh crore. This includes deferred payment liabilities, increasing by Rs.18,300 crore for the year. However, net interest costs declined due to US$9bn of debt refinancing during the year, which has reduced the effective cost of the loan. Overall, external debt constituted 39% of the total debt as of FY2011.
Investment in businesses increased: With Rs 2,810 crore in Sterling & Wilson Renewable Energy and Rs 5,550 crore in Reliance New Energy, RIL continues to invest aggressively in new business segments. Real estate and project management also saw a huge jump, with an investment of Rs 10,000 crore in convertible preference shares of RIL 4IR Realty and Rs 20,000 crore in newly convertible preference shares of Reliance Projects and Asset Management Services.
(The stock recommendations in this story are by relevant research analysts and brokerage firms. FinancialExpress.com takes no responsibility for their investment advice. Capital markets are subject to investment rules and regulations. Please consult your investment advisor before investing .)
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