Reliance Industries Q1 Results Review - Tepid Start To FY25: ICICI Securities

ICICI Securities Report

Reliance Industries Ltd. has reported +2%/-5.5% YoY growth in Ebitda/net earnings in Q1 FY25 (-9/20% QoQ). YoY performance was strong across segments except oil-to-chemical, but QoQ, there was a decline in OTC, retail and upstream segment. Sequential decline was due to weaker OTC margins. Capex in Q1 increased 24% QoQ to Rs 287.8 billion, down 27% YoY.

While earnings performance has been strong and gradual commissioning of New Energy facilities (starting H2 FY25E) may be an added driver, return ratios and free cash flow yields remain muted and valuations seem to adequately factor in the upsides of steady earning per share growth (compound annual growth rate of 9.5/10.9% for consol. Ebitda/profit after tax over FY24–26E).

Reiterate 'Hold' with target price of Rs 2,954.

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