Mukesh Ambani led Reliance Industries (RIL) reported an increase of 13.75% in consolidated net profit for first quarter of financial year 2015 to Rs 59.57 billion.
Net sales for the quarter went up 7.32% Rs 1,046.4 billion for the quarter ended Jun. 30, 2014 over prior year period.
Other income declined 17.47% to Rs 19.74 billion for the quarter ended Jun. 30, 2014 as compared to Rs 23.92 billion in the same period last year.
Reliance reported gross refining margin (GRM) of USD 8.7 a barrel during first quarter.
Commenting on the results, Nitin Tiwari, Religare Institutional Research, said, ''RIL's Q1 PAT (standalone) at Rs 56.5 billion was slightly better than estimates on lower depreciation and interest, even as the operational performance was largely in line. KG-D6 gas production declined marginally to 13mmscmd (Q4:13.6mmscmd) but crude/gas production improved at Panna-Mukta to 2mmbbl/ 5.7mmscmd on higher production from the Panna-L area. Hold; TP Rs 950.''
Meanwhile, Harshad Borawake, Motilal Oswal, said, ''RIL 1QFY15 EBITDA at Rs 75.3 billion was marginally below estimates. Large non-core investments even if accretive over long-term; gains will be backended, diluting overall return ratio in the interim. We increase our FY15/FY16 estimates by 3% to factor in marginally lower depreciation and interest cost. On FY16E basis, the stock trades at 10.9x adj. EPS of Rs 89.9 and EV/EBITDA of 9.4x. Our SOTP-based target price stands at Rs 1,027/share. Neutral.''
Dhaval Joshi, research analyst, Emkay Global Financial Services, said, ''Results beats our and street estimates with PAT at Rs 56.5 billion, flat qoq, on lower depreciation and interest cost. while EBIDTA at Rs 75.3 billion, down by 9.6% qoq. With expected improvement in RIL's business profile in the next 2 years, potential upsides from E&P and attractive valuations, we maintain Accumulate, with a target price of Rs 1,046 (on FY16 SOTP).''
''RIL reported standalone APAT of Rs 56.5 billion in 1QFY15. Weaker GRM (USD 8.7/bbl vs 9.3) and petchem margins led to an EBITDA of Rs 75.3 billion (-10% QoQ) which was below estimates. The key risk for the stock is increasing capex in the telecom business (USD 6 billion spent till FY14; co has guided for additional capex of USD 6 billion). However, we remain positive on RIL on the back of productive capex in the core business. Our SOTP for RIL is Rs 1,100/sh. Maintain Buy,'' said, Satish Mishra, HDFC securities Institutional Research.
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