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<keyword id="19938772" type="General" weightage="20" keywordseo="Reliance-Industries-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries Ltd" meta.hostid="267" meta.entityid="Reliance Industries Ltd">Reliance Industries Ltd</keyword> has won a vote of confidence from global rating agencies <keyword id="20043943" type="General" weightage="20" keywordseo="SP" source="keywords">S&amp;P</keyword> and <keyword id="19950093" type="General" weightage="20" keywordseo="Fitch" source="keywords">Fitch</keyword> after its robust earnings in the fiscal year ended March 31, 2024, supported its growth aspirations and kept leverage under check. S&amp;P Global Ratings and Fitch Ratings in separate notes spoke of its <keyword id="19957744" type="General" weightage="20" keywordseo="EBITDA" source="keywords">EBITDA</keyword> (loosely known as pre-tax profit) rising in the current fiscal year and next on rising revenue and past investments. "<keyword id="19896380" type="General" weightage="20" keywordseo="Reliance-Industries" source="keywords">Reliance Industries</keyword> Ltd's (<keyword id="20002939" type="General" weightage="20" keywordseo="ril" source="keywords">RIL</keyword>) strong earnings will keep leverage in check as the company continues to pursue growth ambitions. We expect the company's debt-to-EBITDA ratio to remain commensurate with the rating (BBB+/Stable/--)," S&amp;P said in a note. The oil-to-telecom-and-retail conglomerate's growth aspirations remain intact, it said, adding the company has ramped up investments in the media business in recent months. In 2024, it entered into binding definitive agreements with The Walt Disney Co for a media joint venture in which RIL will invest Rs 11,500 crore. The company subsequently agreed to buy Paramount Global's 13.01 per cent stake in local entertainment network Viacom18 Media Pte Ltd for about Rs 4,300 crore. "These investments are in line with RIL's strategy to diversify and have a strong presence in a few key industries," the rating agency said. Also, the company received government approval in 2024 to develop gas reserves in the KG-D6 block in the Bay Of Bengal. This could increase the company's gas production capacity by 13-17 per cent. RIL's earlier announced investments include a Rs 75,000 crore expansion plan over five years (starting 2022) for the oil-to-chemicals business. "RIL's earnings will benefit from past investments," S&amp;P said. "We project the company's adjusted EBITDA will rise 2-4 per cent in fiscal 2025 (year ending March 31, 2025)," it added. Just as in the past two years, the digital services segment (Reliance Jio Infocomm Ltd) will be the key growth driver, with segment's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) increasing 10-12 per cent in fiscal 2025. Reliance Jio's wireless subscriber base and average revenue per user will gain from the company's investments in its 5G network since late 2022. Meanwhile, earnings in the oil and gas as well as retail segments will reap the rewards of increased production volume and a wider retail store network. "The EBITDA improvement that we expect in fiscal 2025 comes after a 14 per cent increase to Rs 1.6 lakh crore in fiscal 2024," it said. S&amp;P saw RIL's rising earnings providing it greater balance-sheet flexibility for growth. "We expect the combination of robust operating performances and continued spending to keep the company's debt-to-EBITDA ratio at 1.8x-2.0x over the next two years. This compares with our estimate of 1.7x for fiscal 2024 and our downgrade trigger of 2.5x," S&amp;P said. RIL's leverage has some distance from the upper end of the company's internal leverage target. RIL has reiterated its intention to keep its net debt-to-EBITDA ratio (by its own calculations) below 1x. The ratio was 0.65x as of March 31, 2024. Separately, Fitch Ratings said RIL's EBITDA net leverage is likely to remain below 1x in the medium term, supported by increasing cash flows and lower capex intensity, even as the conglomerate's absolute capex and investments remain high in the near term. "We expect RIL's EBITDA to increase by 8 per cent year-on-year in the financial year ending March 2025 (FY25) and 14 per cent in FY26, while capex intensity (capex/revenue) is likely to reduce below 13 per cent by FY26 (FY24: 15.3 per cent). Lower capex intensity would be driven by growing revenue and reduction in capex after FY25," it said. Fitch expected the conglomerate's Cash Flow from Operations (CFO) to be sufficient to fund its capex from FY26, which will limit additional debt funding and keep its EBITDA net leverage below 1.0x in the medium term (FY24: 0.9x, FY23: 1.1x). "Fitch estimates RIL's FY24 EBITDA net leverage at 0.9x, better than our expectation of 1.1x, driven by marginally higher EBITDA and Rs 20,900 crore of equity raised mainly from the sale of a stake in a subsidiary, even as its capex remained high at Rs 1.5 lakh crore (FY23: Rs 1.4 lakh crore)," the rating agency said in a statement. It rates RIL at 'BBB'/Stable, one notch above India's rating (BBB-/Stable). "We expect the EBITDA increase in the near to medium term to be driven by the telecom and retail businesses, supported by contribution from the upstream oil and gas segment and marginal recovery in petrochemical spreads in the oil to chemical (O2C) segment," Fitch said, adding EBITDA from digital services, largely telecom, is likely to benefit from a 10-15 per cent tariff hike and 15-20 million of additional subscribers in FY25 (FY24: 482 million subscribers). Digital services EBITDA rose by 13 per cent in FY24, as Reliance added 42 million subscribers and monthly average revenue per user increased to Rs 182. Monthly user data consumption increased by 24 per cent to 28.7 GB, one of the highest globally. Fitch expected retail EBITDA to increase by 20-25 per cent in FY25 (FY24: 28%) as Reliance continues to expand its physical stores and digital channels. EBITDA would be supported by a 22.2 per cent increase in its registered customer base to 304 million in FY24. Also, O2C segment EBITDA is expected to remain above Rs 60,000 crore in FY25 (FY24: Rs 62,400 crore), as a gradual improvement in petrochemical spreads from FY24 lows is expected as a supply overhang recedes. Upstream oil and gas EBITDA should stay at around Rs 20,000 crore in FY25 (FY24: Rs 20,200 crore), assisted by the expectation of a 10 per cent increase in gas production in the first full year of operation of three gas fields in the KG-D6 block, which should offset the potential reduction in price realisation with lower gas prices in international benchmarks. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/jnk-india-ipo-allotment-how-to-check-allotment-gmp-listing-date-and-more/articleshow/109597273.cms">JNK India IPO allotment – How to check allotment, GMP, listing date and more</a> <a href="https://www.businessinsider.in/tech/news/jiocinema-introduces-new-ad-free-premium-plans-starting-at-29/articleshow/109581033.cms">An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema</a> <a href="https://www.businessinsider.in/business/auto/webstories/ultraviolette-f77-mach-2-electric-sports-bike-launched-in-india-starting-at-2-99-lakh/slidelist/109615934.cms">Ultraviolette F77 Mach 2 electric sports bike launched in India starting at ₹2.99 lakh</a>

Reliance gets thumbs-up from S&P, Fitch as strong earnings keep leverage in check

Billionaire Mukesh <keyword id="19898589" type="General" weightage="20" keywordseo="ambani" source="keywords">Ambani</keyword>'s <keyword id="6355199" type="General" weightage="20" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword> Ltd will commission a new energy <keyword id="20278828" type="General" weightage="20" keywordseo="giga-complex" source="Orion">giga complex</keyword> in <keyword id="6354766" type="General" weightage="20" keywordseo="gujarat" source="Orion">Gujarat</keyword> in the second half of 2024, the company said in an earnings statement and investor call. <keyword id="19936674" type="General" weightage="20" keywordseo="reliance" source="keywords">Reliance</keyword> is building a giga complex spread over 5,000 acres in <keyword id="6361405" type="General" weightage="20" keywordseo="jamnagar" source="Orion">Jamnagar</keyword> in Gujarat. The complex comprises five giga factories for photovoltaic panels, fuel cell system, green hydrogen, energy storage and power electronics. "On track to commence new energy facilities in phases this year," the company said in a post-third-quarter earnings call with investors. Post announcement of third-quarter earnings on Friday, Ambani stated that the "New Energy Giga Complex is all set to be commissioned in the second half of CY24. I am confident that Reliance's New <keyword id="679565" type="General" weightage="20" keywordseo="energy-business" source="Orion">Energy business</keyword> will play a pivotal role in the global movement for adoption of cleaner fuels." The Dhirubhai Ambani Green Energy Giga Complex will be among the largest integrated renewable energy manufacturing facilities in the world. Reliance has signed an MoU with the Gujarat government to set up 100 gigawatt renewable power at Rs 5 lakh crore capex. It has received in-principle approval for 74,750 hectares (ha.) of land parcels in Kutch for green hydrogen. The firm has strategically invested in ten global technology innovators with strong expertise across the new energy value chain. "Reliance is nearing the commissioning of the first tranche of 5GW module manufacturing capacity in mid-CY24," Nuvama said in a January 17 note. It has via REC Solar signed a supply agreement with China-based Suzhou Maxwell Technologies to buy a high efficiency production line for HJT cells (4.8GW capacity). It signed a 5.2GW HJT module automation production agreement with China-based SC Solar in January 2023. It won PLIs under both rounds of solar modules PLI (Round 1: USD 0.3 billion, 4GW; Round 2: USD 0.4 billion, 6GW). Reliance (apart from Greenko) is the only company to win incentives for both green hydrogen and electrolysers concluded recently. It won incentives of USD 0.3 per kg for electrolyser capacity of 300MW and USD 0.23 for green hydrogen capacity of 90,000 tonnes. Besides, it has won PLI under ACC battery storage for 5GW capacity. "These incentives are likely to assist Reliance achieve a green hydrogen cost of USD 1' 1.5 per kg," Nuvama said. Given <keyword id="20002939" type="General" weightage="20" keywordseo="ril" source="keywords">RIL</keyword> is the largest producer and consumer of grey hydrogen, transition to green hydrogen shall enable it to improve margins ahead, it said. The current green hydrogen cost hovers USD 3 per kg, which remains 1.5x compared to grey hydrogen produced using natural gas due to the high cost of generating solar/wind energy as well as high electrolyser cost. Presently, a hybrid of solar and wind remains the cheapest source of generating green hydrogen. The cost for solar remains the highest due to low PLF of electrolysers at 30' 35 per cent versus wind at 65' 70 per cent, and for hybrid 70' 75 per cent.

Reliance to commission new energy giga complex this year

<ul><li><keyword id="6484187" type="General" weightage="80" keywordseo="ril" source="Orion">RIL</keyword> is now entering its fourth capex cycle, says <keyword id="48670" type="General" weightage="50" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword>. </li><li>It has pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into the new energy ecosystem. </li><li>RIL’s investment cycles provided 2-3x value creation for shareholders in the last two decades, says Morgan Stanley. </li><li>“We see up to $60 billion value creation in the new energy business by 2025,” the report says. </li><li>However, if refining margins are hit, <keyword id="10926" type="General" weightage="50" keywordseo="reliance" source="Orion">Reliance</keyword>’s annual debt will go up by $3 billion per annum and impact cash flows. </li></ul>Reliance has always gone big – and every capex cycle it undertakes is bigger and ‘newer’ than the last. The oil to telecom to retail major is now entering into the fourth capex cycle, according to Morgan Stanley, after the company pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into a new energy ecosystem. In his own words, RIL’s chairman <keyword id="3820" type="General" weightage="50" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword> called it the most ambitious ever, at the 45th annual general meeting. In its latest report, Morgan Stanley says that every time RIL re-imagined its business, it has executed above investor expectations. “Investment cycles have unwound with around two to three times value creation for shareholders in the last two decades with every decade seeing around $60 billion in market cap creation,” the report says. This fourth cycle will also produce higher value quickly as its new energy pivot is integrated with its chemicals business and its own large captive use. “RIL’s integrated approach on solar panels and mobility/storage batteries, and focus on providing an alternative to China does stand out and we see up to $60 billion value creation in the new energy business by 2025. We raise our base case new energy valuation to $32 billion to account for quicker monetization,” the report says. RIL, which is a net energy consumer at Jamnagar, will make the green choice by putting more solar and green hydrogen projects that can help reduce its own energy costs. Moreso, it will also focus on producing high value added chemicals from its petcoke gasifiers. It will also enter the engineering, procurement and construction business for selling panels and sell panels with solutions on the back of multiple investments in technology to global customers. “We estimate the business to contribute to around $1 billion in EBITDA by 2027,” the report said. How did the past RIL capex cycles work? Starting in 1997 with Jamnagar refinery commissioning, RIL has gone through three important capex cycles so far. These pertain to gas fields at KGD6, the Jamnagar expansion in 2012 and the great re-entry into telecom. While they did create value, it did not come at no cost to the organization in the form of write-offs, impairments and ‘challenged capex’. “In every capex cycle, RIL also had its share of challenges, such as the write off of investments for petcoke gasifiers, telecom spectrum and upstream shale investments,” the report said. RIL had invested in three shale gas assets in 2010 and 2013 but exited them in 2017. In addition to investing in KGD6 block in the Krishna Godavari which is producing over 25 mmscmd of gas, RIL had also invested in Cauvery and Mahanadi basins over the years. RIL also had to rejig its investments in retail between 2006-2010 and emerged stronger in 2015-16, the report said. RIL capex that was challenged <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Challenged capex </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY03-FY10 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$12.5 billion upstream exploration and production -Includes $2.7 billion impairment taken on shale investments </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY12-FY16 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$8 billion capex into petcoke gasifier </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY18 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$2 billion spectrum writeoff </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$4 billion impact on petcoke gasifier value during hiveoff </td></tr></tbody></table>Source: Morgan Stanley Telecom and retail businesses are ‘settling’ Morgan Stanley believes that the timing for new energy investments is ripe. Its other businesses are unwinding and expected to unwind faster in the future. After kick starting the business with ‘free data’ and still retaining the tag of providing the cheapest data offerings, <keyword id="2003276" type="General" weightage="50" keywordseo="jio" source="Orion">Jio</keyword> is on the verge of reaping benefits. Telecom business has become a three-player market and the report expects the average revenue per user to grow by over 50% over the next four to five 5 years. That means Jio’s revenues can expand to 1.6 times its FY22 levels. It also expects its 5G investments to yield quicker monetization than 4G did. The biggest advantage that new energy investments bring is the global and national support as India pledges to move towards Net Zero emissions by 2070. However, green hydrogen, solar panels and battery technology is a fast evolving sector with new changes afoot. “Policy support in this cycle is also increasing for the new energy vertical and the government recently approved a bill in parliament to raise the use of alternative fuels, provide incentives for investments in new energy and start carbon trading also points to rising total addressable market for RIL – something we saw less of in previous cycles,” the report said. But there is a catch. For its new energy business to run smoothly, RIL needs its refining business to hold steady. Refining margins fund nearly a third of RIL's investment plans and if margins were to decline to cycle low as the business is cyclical — it will reduce operating cash flows by 20% and annual debt would rise by $3 billion, as per Morgan Stanley’s calculations. “While cycle low gross refining margins are not sustainable as there would be a supply response, we do see a net impact of 15% hit to our net asset value as RIL would see its multiple de-rate as well,” the report said. SEE ALSO <a href="https://www.businessinsider.in/business/corporates/jamnagar-is-going-green-but-on-the-back-of-its-oil-and-chemicals-business/articleshow/93859168.cms">Jamnagar is going green but on the back of its oil and chemicals business</a> <a href="https://www.businessinsider.in/business/corporates/news/gautam-adanis-overly-ambitious-growth-plans-can-spiral-into-a-massive-debt-trap-fitch/articleshow/93725014.cms">Gautam Adani’s overly ambitious growth plans can spiral into a massive debt trap: CreditSights report</a> <a href="https://www.businessinsider.in/finance/news/worst-of-times-can-also-be-the-best-of-times-says-anand-mahindra/articleshow/93376032.cms">Worst of times can also be the best of times, says Anand Mahindra</a>

RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

<ul><li><keyword id="2931774" type="General" weightage="20" keywordseo="nifty50" source="Orion">Nifty50</keyword> companies’ December-quarter revenue is likely to grow 16% over last year, says a report by Phillip Capital.</li><li>Analysts expect it to be a tepid quarter for most sectors, including infrastructure, specialty chemicals, IT and metals.</li><li>However, analysts say banks will continue to outperform with strong tailwinds for the sector despite global challenges.</li><li>NBFCs, FMCG and autos are likely to report moderate to robust growth in the quarter.</li></ul>Yet another earnings season has begun, as always, with IT services companies reporting a mixed set of numbers. That pretty much sets the tone of the quarter as strategists expect Nifty50 companies to report on-year revenue growth of 16% and a 10% growth in net profit. Analysts expect it to be a tepid quarter for most sectors, including infrastructure, specialty chemicals, IT and metals. On the other hand, sectors like banks, NBFCs, FMCG and autos are likely to report moderate to robust growth in the quarter. “Q3FY23 is expected to be a soft quarter along with slight margin improvement. We will be watching for management commentary on India and global demand outlook,” says a report by Phillip Capital. “We are of the view that the financial sector will continue to perform while consumption space will remain under pressure. Investment space is expected to perform well led by public and private capex expansion.” Seasonally weak quarter for IT, Reliance to have a strong quarter <a href="https://www.businessinsider.in/business/corporates/news/infosys-results-q3-fy23-infosys-raises-revenue-guidance-for-fy23-to-16-16-5/articleshow/96941824.cms">TCS has kicked off </a>the earnings seasons with lower-than-estimated growth – it reported a 3.98% sequential growth in net profit at ₹10,846 crore in the December quarter. On the other hand, Infosys beat analysts’ expectations with a 20.2% y-o-y increase in its revenue to ₹38,318 crore in Q3 and raised its full-year revenue growth guidance. <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-lowers-revenue-guidance-for-fy23-to-13-5-14-q3-revenue-and-profit-growth-beat-expectations/articleshow/96944379.cms">HCL Technologies </a>reported a 19.6% year-on-year growth in its topline to ₹26,700 crore, while its net profit grew 19% YoY to ₹4,096 crore, beating analyst <a href="https://economictimes.indiatimes.com/markets/stocks/earnings/hcl-tech-to-announce-q3-results-on-thursday-heres-a-preview-of-what-to-expect/articleshow/96915899.cms">expectations</a> in both the areas. Analysts had expected muted revenue growth from the IT services sector in the third quarter on account of it being a seasonally weak quarter. “The December quarter is a seasonally weak quarter mainly due to higher furloughs. In addition, macro challenges are leading to weakness in mortgage, luxury retail, high-tech and slowdown in 5G capex,” said a report by IDBI Capital. Furlough is a leave of absence from work for which the employee is not paid. Meanwhile, the oil-to-telecom conglomerate Reliance Industries is expected to announce a robust quarter due to strong recovery in the retail segment along with decent uptick in other segments. “We expect Reliance Industries Limited’s (RIL) consolidated PAT to increase by 27% q-o-q to ₹17,316 crore due to improvement in standalone earnings on better refining/petchem margin, decent growth at Jio and strong recovery for retail business,” said a report by Sharekhan. Banks to see strong December quarter on higher loan rates Net interest margin (NIM) will see sequential improvement as lending rates have risen in line with RBI’s repo rate increases, say analysts. Since May last year, <a href="https://www.businessinsider.in/finance/news/rbi-hikes-repo-rate-by-35-bps-taking-rates-to-a-high-of-6-25/articleshow/96045841.cms">RBI has hiked interest rates by 225 basis points so far</a>. While banks benefited from rate hikes in Q2, analysts see more room for a <a href="https://www.businessinsider.in/finance/banks/news/sbi-hdfc-bank-axis-bank-among-other-private-and-public-bank-earnings-could-see-a-further-ramp-up-in-q3-2022/articleshow/96768992.cms">further ramp up in Q3 </a>as well. “We believe business momentum for banks is expected to remain strong, led by strong tailwinds in the sector and is likely to sustain over the medium term as higher inflation gets tamed, revival of the capex cycle, higher consumption, and increased business confidence,” said a report by Sharekhan. “Strong asset quality outlook, additional provision buffers, higher PCR (provision coverage ratio) levels, increased capital buffers, and core credit cost undershooting augur well for the sector,” added the report. FMCG may get a boost from price hikes The fast-moving consumer goods (FMCG) sector is expected to pass the quarter with flying colours on the back of price hikes amid elevated inflation. “Most of the consumer companies are expected to report decent revenue growth; however, a majority of revenue growth will be driven via price hikes, which companies have taken in past quarters to combat unprecedented raw material inflation. Rural demand continues to remain muted. Delay in winter to impact winter portfolio,” said Phillip Capital. “We expect our FMCG universe to deliver sales/ EBITDA/ PAT growth of 11%/ 7%/ 8% YoY in 3QFY23. Sustained inflation impacted both volume offtake and margins,” said a report by Antique Stock Broking. ITC is seen reporting strong growth across businesses with the cigarette business registering a double-digit volume growth. Detergents will likely drive Hindustan Unilever's performance, with margins recovering q-on-q due to a moderation in palm oil - a key input. Autos to reap benefits of festive quarter Despite the near-term challenges of semiconductor chip shortage and geopolitical challenges, analysts are optimistic about autos based on high demand for passenger and commercial vehicles. “Q3FY2023 is expected to be a strong quarter with a 20.4% y-o-y increase in revenue. Margins are expected to show improvement on a q-o-q basis, led by operating leverage benefits, cost rationalisation, and softening commodity prices,” said a report by Sharekhan. Further, strong demand, easing supply constraints, and falling commodity prices are likely to provide relief to automobile original equipment manufacturers (OEMs) and ancillary companies. Ferrous players expected to outperform non-ferrous companies Ferrous players – Tata Steel and JSW Steel – are expected to post better Q3FY23 earnings compared to non-ferrous companies, which include Hindustan Zinc, Hindalco Industries and Vedanta. “For Q3FY23, we expect steel producers to post higher EBITDA QoQ primarily due to sharp fall in coking coal and iron ore price offsetting decline in sales volume sequentially,” said a report by Centrum broking firm. After a challenging first half of the financial year, the domestic steel industry should witness a better second half, says Elara Capital. “The recent removal of exports duty and the likely rise in domestic demand led by the start of the busy season should lead to healthy volume for domestic steelmakers,” the report said. For non-ferrous companies, there are expectations of a marginal fall in quarterly operating profits due to fall in LME (London Metal Exchange) aluminium and zinc prices. Cement sector: Easing input costs in 2H FY23 to drive earnings Analysts say the cement industry is seeing a healthy demand environment with improving cement process and decline in pet coke and coal prices. “Weighted average EBITDA/tonne is expected to recover sharply from a multi-quarter low to ₹765 owing to q-o-q improvement in cement prices, higher demand, and easing power and fuel costs. Hence, operating profits and net profits are expected to rise by 50.9% q-o-q and 77.8% y-o-y, respectively,” said a report by Sharekhan providing estimates for cement companies. The report said that it expects cement demand to remain healthy in the second half of FY23 alongside improving operating margins. Further, analysts will eye commentaries on ongoing and future capex plans. BPCL, HPCL, IOC to benefit from falling oil prices Oil marketing companies – BPCL, HPCL and Indian Oil Corporation – will likely benefit from Brent crude oil prices being on a downtrend since the last couple of months due to a lockdown in China, one of the biggest consumers of oil. “We expect OMCs’ operating performance would improve on sequential basis in Q3FY23 as marketing under recoveries would reduce sharply supported by a ~$11/bbl q-o-q decline in crude oil price while there has been no change in the retail petrol/diesel price,” said a report by Sharekhan. The report added that it expects all three OMCs to report positive EBITDA – Indian Oil (₹ 5,836 crore), BPCL (₹3,112 crore) and HPCL (₹629 crore) in Q3FY23 compared to negative EBITDA of ₹8,841 crore, ₹4,148 crore and ₹1,859 crore in Q2FY23, respectively. Under recoveries is the gap between the cost and the selling price of fuel. If the selling price is lower than the cost price, higher the under recoveries. Thus, a fall in crude oil prices benefits these companies at a time when there has been no hikes in petrol and diesel prices. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/hcl-tech-lowers-revenue-guidance-for-fy23-to-13-5-14-q3-revenue-and-profit-growth-beat-expectations/articleshow/96944379.cms">HCL Tech lowers revenue guidance for FY23 to 13.5-14%, Q3 revenue and profit growth beat expectations</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/infosys-results-q3-fy23-infosys-raises-revenue-guidance-for-fy23-to-16-16-5/articleshow/96941824.cms">Infosys raises revenue guidance for FY23 to 16-16.5%, revenue growth beats analyst expectations</a>

Nifty50 set to clock 10% increase in profit in Q3; banks likely to outperform

<ul><li>The 30-stock <keyword id="6484188" type="General" weightage="20" keywordseo="sensex" source="Orion">Sensex</keyword> closed the day at 63,099, up 0.67%, while the 50-stock index <keyword id="2931774" type="General" weightage="20" keywordseo="nifty50" source="Orion">Nifty50</keyword> closed at 18,758, up 0.75%.</li><li>Earlier in the day, the 30-stock Sensex hit a high of 63,303, while the 50-scrip Nifty50 touched 18,816.</li><li>This is the seventh consecutive day of gains for the Sensex and the Nifty50.</li><li>Analysts are now expecting a further rally in the market that will take the Nifty50 past the 19,000 mark.</li><li>Amongst the most active stocks on the Nifty50 index today were Reliance Industries, <keyword id="6653" type="General" weightage="20" keywordseo="icici-bank" source="Orion">ICICI Bank</keyword>, Infosys, HDFC, and HDFC Bank.</li></ul>India’s benchmark indices Sensex and Nifty50 hit record highs for the third consecutive session on Wednesday, crossing their respective psychological barriers of 63,000 and 18,750, as the market found support from strong fundamentals and foreign inflows. The market was also buoyed by <a href="https://www.businessinsider.in/finance/news/slower-rate-hikes-on-the-cards-say-analysts-ahead-of-rbis-december-monetary-policy-meet/articleshow/95881537.cms">hopes</a> that the Reserve Bank of India would reduce the quantum of its interest rate hike next week. Moderating inflation, cooling crude prices and easing commodity prices are likely to influence the central bank to ease up on the rate hikes, analysts said. Foreign institutional investors (FII) were net buyers on Wednesday, ploughing in ₹9,010 crore, while domestic institutional investors (DII) sold equities worth ₹4,056 crore. Overall, FIIs invested ₹22,546 crore in November in equities, while DIIs sold ₹6,301 crore. Earlier in the day, the 30-stock Sensex hit a high of 63,303, while the 50-scrip Nifty50 touched 18,816. The Sensex closed the day at 63,099, up 0.67%, while the 50-stock index Nifty50 closed at 18,758, up 0.75%. This is the seventh consecutive day of gains for the two indices. In the last five trading sessions, the Sensex has gained 2.16% while the Nifty50 went up by 2.49%. “The beauty of the current rally is that the market is finding support from new sectors every day. In the second half of 2022, there is a clear trend of outperformance of Indian equity markets. This trend is likely to continue despite the fact that we are trading at expensive valuations compared to most of our global peers, as our fundamentals are strong and we have strong support from domestic money,” said Santosh Meena, head of research at Swastika Investmart. Analysts are now expecting a further rally in the market that will take the Nifty50 past the 19,000 mark. “The rotational buying across sectors is fuelling the recent surge while the global markets are not offering any clear signal. We’re now eyeing a new milestone of the 19,000 mark in Nifty,” said Ajit Mishra, VP - technical research at Religare Broking. All sectoral indices closed the day in the green today, with metals, auto, FMCG and realty being the top gainers. PSU banks was the only sectoral index to post a decline today. Most of the Asian markets gained on Wednesday, with Hong Kong’s Hang Seng gaining the most at 2.33%, followed by Korea’s KOSPI at 1.61%. Brent crude oil gained over 2.2%, hovering around $86.1 per barrel. Amongst the most active stocks on the Nifty50 index today were Reliance Industries, ICICI Bank, Infosys, HDFC, and HDFC Bank. Meanwhile, the top gainers on the 50-stock index were Mahindra &amp; Mahindra, Hindalco Industries, Grasim Industries, SBI Life Insurance and UltraTech Cement Top gainers and losers on the NSE on Wednesday <div type="image" title="daily-profit-loss-7" msid="95887613" hostid="261" sizebytes="52380"></div> All in all, 13 stocks hit fresh 52-week highs during the day, including ICICI Bank, Britannia, Apollo Tyres, Indian Railway Finance Corporation (IRFC) and Raymond. The Rupee posted a big gain over the US dollar, rising 34 paise to close at 81.38. It had closed at 81.72 against the dollar on Tuesday. Earlier, analysts at ICICI Direct <a href="https://www.businessinsider.in/finance/news/worst-largely-over-for-rupee-may-appreciate-towards-80/usd-by-end-of-2022-23-says-icici-direct/articleshow/95878404.cms">said</a> that the worst might be over for the Rupee, and that it could appreciate to 80 per US Dollar by the end of FY23. On the BSE, 1,993 stocks moved higher while 1,486 closed lower on Wednesday. <div type="image" title="sectoral-indices-7" msid="95887643" hostid="261" sizebytes="47606"></div> SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/article/its-not-just-mercedes-even-bank-deposits-are-competing-with-equities/articleshow/95879457.cms">It’s not just Mercedes, even bank deposits are competing with equities</a> <a href="https://www.businessinsider.in/finance/news/slower-rate-hikes-on-the-cards-say-analysts-ahead-of-rbis-december-monetary-policy-meet/articleshow/95881537.cms">Slower rate hikes on the cards, say analysts ahead of RBI’s December monetary policy meet</a> <a href="https://www.businessinsider.in/india/news/government-listed-private-companies-capex-to-touch-21-lakh-crore-in-fy23-icici-securities/articleshow/95858117.cms">Capex cycle to touch ₹21 lakh crore in FY23, but there's a catch</a>

Sensex, Nifty50 rewrite all-time highs yet again – RIL, HDFC twins most active, ICICI Bank touches new 52-week high

<ul><li>Analysts believe that <keyword id="3820" type="General" weightage="20" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword>’s <keyword id="6355199" type="General" weightage="20" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword> could end the financial year 2021-22 on a high.</li><li>A continuation in the earnings upcycle is expected as chemical prices are rising, broadband subscribers are picking up, online retail gains traction and new energy investment picks up steam.</li><li>Shares of RIL have gained nearly 10%, outperforming benchmark index Sensex that tumbled nearly 6% so far in 2022.</li><li>The stock will remain in focus as investors await the firm’s March quarter earnings that is scheduled on May 6, Friday.</li></ul>Reliance Industries could bring cheer to its investors with the March earnings scheduled to be announced later today (May 6) as analysts believe the Mukesh Ambani-led company is looking at growth in three of its key businesses — refining, retail and telecom. Reliance Industries’ shares will be in focus as investors await the firm’s March quarter earnings that is scheduled on May 6, Friday. <div type="image" title="RIL chart 5" height="900" width="1200" msid="91356059" hostid="261"></div>Reliance Industries could see earnings upcycle as chemical prices are rising, broadband subscribers are picking up, online retail gains traction and new energy investment picks up, according to a report by Morgan Stanley as it states “an earnings upgrade cycle is taking hold and is key to reversing RIL's past year of underperformance.” Analysts at Yes Securities second the views as they say Reliance Industries is expected to report improvement in its earnings — on both quarterly and annual basis — on account of stronger refining margins. The revenue, however, would face a partial offset due to weaker margins in petrochemicals. Also read: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms</a> Retail and telecom to drive Reliance’ growth, with refining gains offset by rising crude oil prices This would be the seventh quarter of sequential improvement in Reliance’ earnings. In the March quarter, refining and telecom are expected to drive growth with some offsets from the petrochem side, say analysts. In fact, <keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> could post a <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">blockbuster ₹5,000 crore profit</a> in the March 2022 quarter. Analysts are gung-ho about the telecom sector’s performance in the March 2022 quarter. Analysts say that the telecom segment is expected to benefit from higher average revenue per user (ARPU) realisation whereas the retail segment would reap the benefits of sales traction driven by growth in network. Notably, RIL has invested more than <a href="https://www.businessinsider.in/retail/news/asias-richest-man-mukesh-ambani-is-on-a-shopping-spree-for-private-fashion-labels/articleshow/90439055.cms">$1 billion in acquiring assets and building capabilities</a> of <keyword id="58448" type="General" weightage="20" keywordseo="reliance-retail" source="Orion">Reliance Retail</keyword>. Also read: <a href="https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms">https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms</a> “With rising penetration and market share wins ahead in consumer businesses (telecom tech and retail), we see the medium term growth story remaining intact as well,” said Goldman Sachs. Besides, recently the stock has been rising on hopes of its new hydrogen energy segment. Reliance best positioned to capitalise on hydrogen (new energy) segment Global investment banking firm Morgan Stanley expects the hydrogen segment of RIL to contribute 10% to its earnings with a net asset value of $10 billion by the end of this decade (by 2030). Analysts at Morgan Stanley believe <a href="https://www.businessinsider.in/business/corporates/news/analysts-up-mukesh-ambanis-ril-target-price-by-over-20/articleshow/90981139.cms">hydrogen adoption plans </a>are quickly progressing in India in line with global peers, which makes RIL best positioned to capitalise on this segment. “For RIL, strong cash flow generation in the best in class old energy business (low cost structure and highest complexity) can fund the capex of the New Energy business and in turn drive one of the fastest and most profitable net zero transitions by 2035 amongst large energy companies, on our analysis,” said analysts at Goldman Sachs. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">Reliance Jio could post a blockbuster ₹5,000 crore profit in the March quarter, say analysts</a> <a href="https://www.businessinsider.in/retail/news/reliance-industries-retail-business-could-reach-new-heights-all-thanks-to-increased-investments-and-muted-covid-wave/articleshow/91312838.cms">Reliance Retail could touch new heights thanks to a muted third wave of COVID-19 and increased investments</a>

Reliance Industries could see an earnings boost driven by its three pillars — refining, retail and telecom

<ul><li>Shares of the Mukesh Ambani owned Reliance Industries fell sharply today by as much as 4% in reaction to its earnings results on Friday evening.</li><li>The company had reported a weaker than expected net profit with a fall in profitability for the first time in FY22.</li><li>Indian benchmark indices, Sensex and Nifty 50, also remain in a weak spot as there was a huge sell-off in shares of heavyweight Reliance Industries.</li></ul>Shares of oil-to-telecom conglomerate company owned by Mukesh Ambani were among the biggest losers on the street and one of the reason benchmark indices was still in red. Reliance Industries <a href="https://www.businessinsider.in/business/corporates/news/reliance-industries-first-indian-company-to-near-100-billion-in-revenue/articleshow/91381614.cms">reported </a>a weaker than expected net profit and also reported a fall in profitability for the first time in FY22. Indian benchmark indices, Sensex and Nifty 50 remained in a weak spot as there was a huge sell-off in shares of heavyweight Reliance Industries amid poor market conditions. The company posted a net profit of ₹18,000 crore with a revenue of ₹2.11 lakh crore in the March quarter – a decline of 12.25% in profit sequentially, while revenue is up 10.77%. Analysts expected a growth of 4.7% in profit and 14.5% in revenue. Consolidated profit after tax missed the street’s estimate by 4% year-on-year and 3% quarter-on-quarter due to lower other income and miss in retail business, say analysts at Sharekhan. <div type="image" title="ril profit 2" height="900" width="1200" msid="91433413" hostid="261"></div>Meanwhile, analysts at Kotak Institutional Equities feel rise in net debt levels, elevated capex and negative FCF (free cash flow) were a tad disappointing yet again in the March quarter earnings of the company. Quarterly performance of Reliance Retail in Jan-Mar was disappointing The latest report by Sharekhan analysing the company’s March quarter earnings states that the retail revenues were muted and remained flat on quarter versus expectation of decent growth in Jan-Mar. Further, analysts feel an IPO of the company’s consumer business would give better returns to investors over coming years and unlock value in the digital and retail business of the firm. Reliance Retail’s net profit declined by ₹120 crore in the January-March quarter of 2022, on a quarterly basis. The company reported a net profit of ₹2,139 crore in Q4 compared to ₹2,239 crore in the previous quarter. Even on a year-on-year basis, Reliance Retail’s net profit declined. Analysts at YES Securities believe <keyword id="6484187" type="General" weightage="20" keywordseo="ril" source="Orion">RIL</keyword>’s retail business could be impacted by the current inflationary environment in FY23. The report adds that the petrochemical environment appears weak primarily due to tepid Chinese demand and firmer naphtha prices. RIL exports Naphtha that typically is consumed in steam crackers for petrochemical manufacturing. Decline in subscribers at Reliance Jio remains a key negative, say analysts This is the third consecutive quarter of <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-results-q4-fy22-profit-revenue-subscriber-growth/articleshow/91374478.cms">subscriber loss </a>for Reliance Jio – it has lost over 30 million subscribers over the last three quarters. Overall, for the financial year 2021-22, Jio’s subscriber numbers are down by 16 million. Slower-than-expected subscriber additions and ramp-up of broadband services, remains a key risk for the company, says analysts at Sharekhan. The telecom segment posted 14% growth in its net profit between January and March 2022, which is Jio’s <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-results-q4-fy22-profit-revenue-subscriber-growth/articleshow/91374478.cms">strongest profit</a> growth in five quarters, but still below <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-could-post-a-blockbuster-5000-crore-profit-in-the-march-quarter-say-analysts/articleshow/91316654.cms">analyst expectations of ₹5,000 crore quarterly profit</a>. On the bright side, analysys believe that the company's ARPU (average revenue per user) could improve further in FY23. As of 11:34 a.m, shares of the company were down 2.88% at ₹2,545 per share. Going ahead, analysts expect shares to increase by up to 27%. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage firm </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sharekhan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,050 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YES Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,840 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,050 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Morgan Stanley </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,253 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jefferies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,950 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CLSA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,955 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goldman Sachs </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,200 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/snacks-health-bills-electricity-bills-and-more-will-add-to-your-chunkier-home-loan-emis/articleshow/91429752.cms">Snacks, health bills, electricity bills and more will add to your chunkier home loan EMIs</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/last-day-to-subscribe-to-lic-ipo-gmp-drops-to-60/articleshow/91424705.cms">Last day to subscribe to LIC IPO, GMP drops to ₹60</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/campus-activewear-shares-debuts-at-21-premium-despite-weak-market-trends/articleshow/91430347.cms">Campus Activewear shares debuts at 21% premium despite weak market trends</a>

RIL tumbles nearly 4% on weaker than expected profits, slowdown in retail business and decline in Jio subscriber additions

<keyword id="6361649" type="General" weightage="80" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> has set a 12 month price target of ₹3,200 for Reliance Industries Limited (<keyword id="6484187" type="General" weightage="100" keywordseo="ril" source="Orion">RIL</keyword>) stock with a 22 per cent upside. "We see RIL as a unique energy transition story. For RIL, strong cashflow generation in the best in class old energy business (low cost structure and highest complexity) can fund the capex of the New Energy business and in turn drive one of the fastest and most profitable net zero transitions by 2035 amongst large energy companies, on our analysis," Goldman Sachs said. RIL is adopting a manufacturing approach to net zero-emissions with a hyper integrated model spanning solar, battery and hydrogen and a focus on net zero supply chain (already spent $1.5 billion to acquire technologies across the solar, battery and hydrogen ecosystems). "We recently revised up FY23/24 EBITDA by 11 per cent/5 per cent driven entirely by RIL's old energy business such as <keyword id="13591981" type="General" weightage="50" keywordseo="refining-and-gas" source="Orion">Refining and Gas</keyword>. We see refining tailwinds to sustain given improved supply demand from closures, jet fuel demand recovery ahead, lower Chinese exports, low inventory and supply disruption. With rising penetration and market share wins ahead in consumer businesses (telecom tech and retail), we see the medium term growth story remaining intact as well," the report said. Overall we expect strong earnings growth of 35 per cent CAGR in FY21-24E, with our FY23/24E earnings 26 per cent/26 per cent above consensus. For 4QFY22 we forecast 7 per cent <keyword id="903746" type="General" weightage="50" keywordseo="qoq" source="Orion">QoQ</keyword> growth led by refining and telecom division with further acceleration ahead, Goldman Sachs said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/upcoming-new-whatsapp-features-download-timers-message-reactions-and-more/articleshow/90774182.cms">Best upcoming WhatsApp features – download timers, message reactions and more</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/opinion-the-demand-for-bnpl-is-being-fuelled-by-low-penetration-of-credit-cards-in-india/articleshow/90774013.cms">OPINION: The demand for BNPL is being fuelled by low penetration of credit cards in India</a>

Goldman Sachs sets target price of ₹3,200 for RIL stock with a 22% upside

<ul><li>Rising crude oil and gas prices during the last few quarters because of supply side constraints led by the Russia Ukraine crisis has benefited the oil producer to mint more money.</li><li><keyword id="6354737" type="General" weightage="20" keywordseo="ongc" source="Orion">ONGC</keyword> enters the elite club of top most profitable companies in India as it makes a profit of ₹40,305 crore in FY22.</li><li>The oil producer has surpassed Tata Steel, TCS and HDFC Bank to reach the second position wherein Reliance Industries holds top position.</li></ul>State-owned oil explorer ONGC beat two Tata group firms - TCS and Tata Steel to become India’s second most profitable company, after Reliance Industries, in FY22. Its record profits came in spite of decline in production for the last 11-18 quarters, aging fields, and lack of new discoveries. However, crude oil prices soared to almost $140 a barrel - making even its low output very valuable. ONGC contributes to 70% of India’s total oil and gas production. “A rally in global crude oil and natural gas prices is a key driving factor behind ONGC’s profitability,” said a report by YES Securities. It added that any moderation in crude prices will affect its cash flows as its capex requirement is very high to maintain production in its aging fields. ONGC reported a net profit of ₹40,305 crore for FY22 surpassing Tata Steel, by a decent margin. It also beat one of India’s most valuable companies - TCS in terms of profits - after crude oil prices soared. <div type="image" title="top 5 companies col (1)" height="900" width="1200" msid="91890739" hostid="261"></div>Taxes, sanctions and more to affect ONGC profitability As expected, this rise in profitability might be unsustainable, especially since analysts believe that Russia-Ukraine tensions could settle down, cooling off the soaring crude. “ONGC’s performance depends on how long geopolitical tensions persist as its profits are directly connected to crude oil prices,” Sanjiv Bhasin, executive vice president, markets &amp; corporate affairs at India Infoline, told Business Insider India. Bhasin believes that these tensions will ease by mid-July. As soon as crude prices come down, so will ONGC’s place in the list of most profitable companies. “Brent will not sustain the $110 kind of level. One or two years down the line, Brent will cool down. The two year future market also shows prices cooling off about $80-$90 per barrel range so that will definitely impact the margins for ONGC,” Anshuman Khanna, the founding director of Valpro, told Business Insider India. While the advantages of the war might go away soon, its effects - like sanctions on Russia - could remain and can affect ONGC’s fortunes negatively. <div type="image" title="ongc (1)" height="900" width="1200" msid="91890758" hostid="261"></div>The Russian connection ONGC’s international arm, ONGC Videsh owns stakes in multiple energy assets in Russia. One of the country’s gas producing assets Sakhalin-I has already shown signs of trouble as US major Exxon said that it would exit the block. ONGC has a 20% stake in it, along with interests in Sakhalin II, and Vankor fields in Siberia. “Russian assets are facing two issues -- one is the fact that Russian crude is trading at a discount about $10-$20 to Brent and second issue is repatriation of Russian dividend from these assets because of sanctions. It’s a real risk, which could jeopardize their entire Russian investment,” Anshuman Khanna, the founding directors of Valpro, told Business Insider. The Indian government too isn’t allowing the state-owned oil explorer to enjoy its profits either. It is believed to collect some of it in the form of a <a href="http://theres-a-strong-case-to-levy-windfall-taxes-11653810086031.html">windfall tax on oil producing companies.</a> Analysts at Citi call this tax threat an overhang. There is speculation that the government might impose a 25% tax on profits of oil and gas producing companies as crude prices have surged over 50% in 2022. The stock has gained over the last one year, but does not reflect the positive impact of crude oil on its profits. The sanction risk and taxes are making its short-lived story of profitability even less enticing to investors. <div type="image" title="ONGC profit" height="900" width="1200" msid="91890803" hostid="261"></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/business/corporates/news/nykaa-to-face-competitive-heat-but-its-omni-channel-experience-maybe-the-game-changer/articleshow/91883946.cms">Nykaa to face competitive heat but its omni-channel experience maybe the game changer</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/finance/banks/news/citi-kotak-icici-and-other-investment-banks-earned-2600-crore-through-ipos-last-year/articleshow/91887303.cms">Indian companies raised $14 billion via IPOs and their i-bankers made $300 million in fees</a>

ONGC beats Tata Steel, TCS to become India’s 2nd most profitable company - but Russian links may spoil the party

Mukesh Ambani-led <keyword id="6355199" type="CITY" weightage="20" keywordseo="Reliance-Industries">Reliance Industries</keyword> is on the course to more than double its market capitalisation from $47 billion to $100 billion. 
 
Driven by higher GRMs, Reliance Industries has been outperforming the Sensex since one year now. 
 
As per a Morgan Stanley report, Reliance Industries will hit $100 billion in the next 3-4 years. 
 
"This is just the start. RIL is nearing the completion of its largest-ever capex programme of $46 billion over F14-17, paving the way for a multi-year cycle of strong FCF generation," the report stated. 
 
Morgan Stanley maintains an overweight rating on the stock with a 12-month target price of Rs 1,329, which translates into an upside of 37% from current levels in the next 12 months. 
 
The five reasons stated in the report for Reliance Industries’ capex surge are strong FCF generation starting FY17, Telecom (Jio's) turnaround is key, increase in oil prices to $60/bbl, Reliance Retail revenue to more than double and attractive valuations.

Mukesh Ambani’s Reliance to hit $100 billion m-cap in 4 years, says Morgan Stanley

New Delhi, Oil sector public sector undertakings (PSUs) may have to bear a <keyword id="9705803" type="UNKNOWN" weightage="20" keywordseo="larger-share">larger share</keyword> of <keyword id="10488841" type="UNKNOWN" weightage="20" keywordseo="additional-dividend-payment">additional dividend payment</keyword> to the government this year with almost all companies falling behind on their capex plan for the current fiscal. As of November, the capex of PSU oil companies put together stands at ₹46,303 crore, less than 50% of the annual target of ₹98,522 crore. The government has asked companies to complete at least 75% of capex till the end of December quarter. But this looks highly unlikely now pushing the case for higher dividend payout. In meetings with PSUs, Finance Minister Nirmala Sitharaman had stressed on the need for PSUs to step up <keyword id="6355120" type="UNKNOWN" weightage="20" keywordseo="investment">investment</keyword> during the time of the pandemic to boost overall sentiments and kickstart investment climate in the country. She had specifically urged companies to complete at least 75% of capex target by December-end and more than 100% by March. "It is a double whammy for PSUs now. They have to cough up more either through investments or through payment of additional dividends. It should also be seen that the companies are finding it difficult to meet capex targets given financial and project implementation constraints. Covid has severely dented demand and slowed project implementation. Consequently, there is already a strain on their resources that would get heightened as additional dividend would have to be paid," said a top official of a PSU, asking not to be named. While almost all PSUs are facing delays and difficulties in stepping up the gas and increasing investments, the situation among companies in the oil and gas sector looks worse. Slow demand conditions in early part of the year resulted in slowing of several capex plans. Though the situation has improved from November onwards, still its a long way to go for normalcy to return in the sector. For the government, oil sector PSUs are also set to make big inventory gains due to firming up of crude prices, and hence they are being looked at for higher interim dividend or special dividend and a few may also be considered for share buyback depending on market conditions. Among the oil and gas PSUs, the worse performer in terms of capex spend is the country's largest oil and gas explorer ONGC and largest public sector refiner <keyword id="6356834" type="DOMAIN" weightage="20" keywordseo="indian-oil-corporation">Indian Oil Corporation</keyword>. According to oil ministry's <keyword id="819806" type="COMPANY" weightage="20" keywordseo="Petroleum-Planning-and-Analysis">Petroleum Planning and Analysis</keyword> Cell (PPAC), while ONGC had completed just ₹14,959 crore worth of capex upto November out of FY21 investment target of ₹32,502 crore, IOC's capex upto November is ₹12,104 crore against annual target of ₹26,233 crore. Similarly, HPCL has completed capex of ₹5,658 crore (upto November) against target of ₹11,500 crore; Gail India - ₹2,614 crore against annual target of ₹5,412 crore; Oil India - ₹2,136 crore vs ₹3,877 crore target; MRPL - ₹631 crore vs ₹1,150 crore, OVL - ₹3,765 crore vs ₹7,235 crore. Among the worst performer on capex is privatisation-bound <keyword id="155363" type="DOMAIN" weightage="20" keywordseo="Bharat-Petroleum-Corporation-Ltd">Bharat Petroleum Corporation Ltd</keyword> (BPCL) which has spent just ₹3,716 crore against target of ₹9,000 crore. Officials sources said that PSUs with stock prices higher than the book value and who have sufficient cash funds may also be asked to shell higher dividend in FY21. A call will be taken after the third quarter results of companies are declared late January or early February next year. With the central government being the largest shareholders in PSUs, higher dividend would largely help it to fill its coffers at a time when revenue is constrained due to a overall fall in economic activity during the pandemic while expenditure has risen sharply. Dividend from non-financial PSUs have been budgeted at ₹65,747 crore in FY21. Any increase in this will give a boost to non-tax revenue of the government and help its bridge the rising fiscal deficit that as per initial estimate is now pegged close to 8% of GDP. Finance Minister Nirmala Sitharaman and her predecessors, including the late Arun Jaitley and P. Chidambaram, had maintained the policy of advising non-financial state-owned companies that if they are not utilising their cash reserves for capex needs, they should give it to the Centre through dividends or share buybacks. As per the guidelines issued by disinvestment department DIPAM, every CPSE is required to pay a minimum annual dividend of 30% of PAT or 5% of the net-worth, whichever is higher. Apart from oil sector, several PSUs in power and mining space have completed just about 40% annual capex by November due to constrained business environment. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-mrs-bectors-ril-bharti-airtel-vodafone-idea-ilfs-interglobe-aviation-future-group-deepak-nitrite-jubilant-foodworks-and-others/articleshow/79933826.cms">Top stocks to watch – Mrs Bectors, RIL, Bharti Airtel, Vodafone Idea, IL&amp;FS, InterGlobe Aviation, Future Group, Deepak Nitrite, Jubilant FoodWorks, and others</a> <a href="https://www.businessinsider.in/thelife/personalities/news/from-taking-on-yahoo-to-being-tamed-by-chinas-communist-party-its-been-a-roller-coaster-decade-for-jack-ma/slidelist/79935613.cms">From taking on Yahoo to being tamed by China’s Communist Party— it’s been a roller coaster decade for Jack Ma</a> <a href="https://www.businessinsider.in/careers/news/ey-is-looking-to-hire-9000-techies-in-2021-to-boost-its-digital-services/articleshow/79936576.cms">EY is looking to hire 9,000 techies in 2021 to boost its digital services</a>

You Searched For "ril capex" and got 11 results

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PTI

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RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

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Sensex, Nifty50 rewrite all-time highs yet again – RIL, HDFC twins most active, ICICI Bank touches new 52-week high

Rounak

Bhakti

Reliance Industries could see an earnings boost driven by its three pillars — refining, retail and telecom

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RIL tumbles nearly 4% on weaker than expected profits, slowdown in retail business and decline in Jio subscriber additions

Bhakti Makwana

Goldman Sachs sets target price of ₹3,200 for RIL stock with a 22% upside

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ONGC beats Tata Steel, TCS to become India’s 2nd most profitable company - but Russian links may spoil the party

Bhakti Makwana

Mukesh Ambani’s Reliance to hit $100 billion m-cap in 4 years, says Morgan Stanley

BI India Bureau

Revenue constrained government may push oil PSUs short on FY21 capex to pay higher dividend

IANS

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