Brokerages give Reliance a thumbs up after Q2 show

Brokerages have maintained a positive stance on Reliance Industries following its second quarter results.

Reliance Industries on Wednesday reported a 17.35 per cent year-on-year rise in net profit for the September quarter at Rs 9,516 crore, below estimate of Rs 9,629 crore projected by analysts in an ET Now poll. This was the highest quarterly profit in the company’s history.

Deutsche Bank believes that ramp-up of monetisation at Reliance Jio in mobility as well as fixed broadband should sustain the outperformance over the next six months.

“Jio's acquisition of stakes in Den and Hathway is another step in its strategy to accelerate monetisation of its broadband business. The contribution from expansions and robust downstream margins should drive RIL’s EBITDA growth of 27 per cent CAGR FY18-20,” said Deutsche Bank. Deutsche Bank has revised target price by about 2 per cent to Rs 1,270 due to rolling forward of valuations by six months.

Credit Suisse said that while refining business looks challenged in the near term, petrochemicals business looks stable and the consumer businesses are scaling up well.

Credit Suisse is bullish on the stock as it offers a combination of large cash generating businesses and highgrowth consumer ones. Motilal Oswal and Nomura are also bullish on Reliance Industries. Though further delay in petcoke gasification is disappointing, outlook in energy business remains robust, said Nomura.