Mukesh Ambani-Backed Company Stock Rises 4.7 Per Cent on Strong Q3 Results, Valuation Looks Attractive?
RIL’s shares, which hit a 52-week low of Rs 1,202.10 on December 20, 2024, looks to have reversed their downward trend, bolstered by strong Q3 earnings
Reliance Industries Ltd (RIL), India’s most valuable conglomerate, witnessed its share price surge by 4.7 per cent to a high of Rs 1,326 on Friday, January 17, 2025. The rebound followed robust performances across its key verticals—Oil-to-Chemicals (O2C), Jio Platforms, and Retail.
RIL’s shares, which hit a 52-week low of Rs 1,202.10 on December 20, 2024, looks to have reversed their downward trend, bolstered by strong earnings. In Q3FY25, the company reported a 12 per cent year-on-year (YoY) rise in consolidated net profit to Rs 21,930 crore, its highest ever. Consolidated revenue rose by 7.7 per cent YoY to Rs 2.67 lakh crore, while EBITDA climbed 7.8 per cent to Rs 48,003 crore, with margins improving by 10 basis points YoY to 18 per cent.
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Jio Platforms Leads the Charge
Jio Platforms posted a 17 per cent EBITDA growth to Rs 16,640 crore, driven by a higher average revenue per user (ARPU) of Rs 203.3. The 5G rollout continued aggressively, with 170 million True5G subscribers now accounting for 40 per cent of wireless traffic.
According to Mukesh Ambani, Chairman and Managing Director of RIL, the digital services segment’s growth was driven by sustained subscriber additions, improved customer engagement, and a favorable mix of 5G users.
Oil-to-Chemicals Business
RIL’s O2C business saw revenue rise 6 per cent YoY to Rs 1.49 lakh crore in Q3FY25. EBITDA for the segment stood at Rs 14,402 crore, marginally higher than the Rs 14,065 crore reported a year ago. Revenue growth was attributed to higher production for sale, robust domestic demand, and improved product placement.
The O2C segment includes refining, petrochemicals, fuel retailing (via Reliance BP Mobility Ltd), aviation fuel, and bulk wholesale marketing.
Oil & Gas Segment
The oil and gas business recorded revenue of Rs 6,370 crore, with EBITDA at Rs 5,565 crore, reflecting a margin of 87.4 per cent, a 100 basis point improvement YoY. The segment’s performance was impacted by lower gas volumes and realizations but partially offset by higher CBM gas output and marginal increases in KGD6 gas prices.
Retail Growth Momentum
Reliance Retail achieved a 10 per cent rise in net profit to Rs 3,458 crore for Q3FY25, with gross revenue increasing 8.8 per cent to Rs 90,333 crore. The company added 779 stores during the quarter, bringing its total to 19,102 and covering 77.4 million sq. ft. of operational area. Footfalls reached 267 million across formats, marking a 5 per cent YoY growth.
Post-correction, RIL’s valuation looks attractive. The stock currently trades at a PE multiple of 25.5x, below its three-year median PE of 26.4x. Similarly, its EV/EBITDA of 11.2x is below the three-year median of 13.3x. With Jio and Retail offering strong growth prospects, RIL shares would remain in focus .
As of now, the company’s market capitalization stands at Rs 17.65 lakh crore, with trailing 12-month EPS at Rs 51.54.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.