RIL Loses Over Rs 38,000 Crore In Market Cap As Decline In O2C Business Affects Profit
The RIL share price ended 2.08% down at 2,688.05, the lowest closing level since Jan. 24.
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Reliance Industries Ltd. eroded over Rs 38,000 crore in investors' wealth on Tuesday after its second quarter earnings showed a decline in its oil-to-chemical business, subsequently affecting profit. Revenue of the Mukesh Ambani-led conglomerate declined 0.32% sequentially, which also pressured its margin.
The market cap of the heavyweight NSE Nifty 50 company declined Rs 38,193 crore to approximately Rs 18.2 lakh crore Tuesday, according to data on the National Stock Exchange website. The stock ended at an over-eight-month low and was the top dragger in the NSE Nifty 50 index.
RIL has the second-highest weightage after HDFC Bank Ltd. in India's benchmark Nifty 50. Its weightage is 8.16%.
RIL witnessed a 24% annual decline in the oil-to-chemical business' operating profit as exports slumped 16%. A demand-supply mismatch globally affected the Ebitda, the company noted.
However, analysts expect RIL to notice a revival in its oil-to-chemical business due to the new energy business outlook. The company's retail segment has already noticed a surge in demand from October.
RIL's revenue, net profit, earnings before interest, taxes, depreciation and amortisation, and Ebitda margin largely met analysts' expectations for the second quarter.
RIL Q2 FY25 Earnings Highlights (Consolidated, QoQ)
Revenue down 0.32% to Rs 2,31,535 crore versus Rs 2,31,784 crore (Bloomberg estimates Rs 2,35,519 crore).
Ebitda up 0.75% to Rs 39,058 crore versus Rs 38,765 crore (Bloomberg estimates Rs 40,421 crore).
Ebitda margin up 14 bps to 16.86% versus 16.72% (Bloomberg estimates 17.2%).
Net profit up 10.76% to Rs 19,323 crore versus Rs 17,445 crore (Bloomberg estimates Rs 18,813 crore)
The share price of RIL declined 2.32% to Rs 2,687.25, the lowest level since Jan. 25, 2024. The stock ended 2.08% down at 2,688.05, the lowest closing level since Jan. 24. RIL shares snapped a two-day winning streak on Tuesday.
The stock rose 14.68% in the last 12 months and 3.99% on a year-to-date basis. The total traded volume so far in the day stood at 2 times its 30-day average. The relative strength index was at 28.08, which implied the stock is oversold.
Out of 37 analysts tracking the company, 29 maintain a 'buy' rating, five recommend a 'hold,' and three suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 20.7%.
