Reliance share price declines almost 3% post Q1 Results. Should you Buy, Sell or Hold the stock?

Stock Market Today: Reliance share price declined around 3% in morning trades on Monday, post Q1 results that were declared on Friday post market hours. The Reliance share price that opened at ₹3017.50 slipped to lows of ₹3,018.05, marking a decline of almost 3% on the NSE over the previous close of close to ₹3110. Reliance Industries reported net profit at consolidated levels at ₹17,445 crore declined slightly more than 4% y-o-y though came in line with the consensus analyst estimates. The decline in earnings was expected due to weakness in Oil to chemical segment. Here is what analysts say

Jefferies with positive ratings watchful on Retail segment

Jefferies India Ltd who has maintained Buy ratings on Reliance Industries share price however has cut its target price slightly to ₹3525 ( ₹3580 earlier) as they tweaked their earnings before interest tax depreciation and amortizations (Ebitda) estimates. However their target price still indicates more than 14% upside. Jefferies is watchful on pick up of growth in the retail segment

Consolidated Earnings before interest tax depreciation and amortizations (Ebitda) at close to ₹38,800 crore as per Jefferies calculations declined 9% sequentially but was in line with their estimates. Oil to Chemicals (O2C) and telecom arm Jio were in line with their expectations however Retail net profit was 4% below their estimates on higher tax rate and higher net interest expense.

Retail revenue growth (7% core) as per Jefferies moderated to a multi quarter low, with core revenue per square feet seeing 10% decline YoY on a soft base, on continued store and B2B rationalization as well as soft Fashion and Lifestyle

Antique says weak O2C and Retail led to a miss

Analysts at Antique Stock Broking said that earnings were short of estimates due to weak O2C and retail. Reliance 1QFY25 Ebitda of around ₹38800 crore was lower than their estimates of ₹40200 Crore and consensus estimate of ₹39800 Crore. The decline was largely expected, primarily driven by weak O2C earnings due to weaker cracks however Retail was net profit was lower than their expectations.

Antique has cut their our FY25 Ebitda estimate by 5% mainly led by weakness in O2C earnings while keep their FY26 and FY27 estimates largely unchanged. Their target price for Reliance Industries stock also gets reduced to ₹3268.

Motilal Oswal expects Jio IPO to unlock valuation

Motilal Oswal Financial Services with Buy ratings on Reliance share price, said that structurally, they are bullish on the refining business given globally capacity growth lagging oil demand growth . In telecom, they are modeling an Average revenues per user (ARPU) CAGR (compound annual growth rate )of 12% over FY24-26. In addition, they see the potential IPO for RJio to unlock valuation for the telecom business. They remain positive on the retail business, where they are expecting 19% revenue and Ebitda CAGR each over FY24-26. Their target price of ₹3409 for Reliance share price indicates more than 10% upside

Kotak after weak Q1 says focus will be on the AGM

Reliance 1QFY25 consolidated Ebitda as per Kotak Institutional Equities was 1% below their estimates. Except for digital services , where performance came in line, the Ebitda of each key business was 3-4% below Kotak's estimates. O2C was particularly weak, and Retail had another weak quarter, they said.

With the telecom tariff hikes done, investor focus now will shift to the upcoming Annual General Meeting as there are expectations around likely announcements on consumer business IPOs as per Kotak Also recovery in retail and Oil to chemical will be watched. Kotak has tweaked its FY2025-26 estimated Ebitda by ~4%. Kotak's target price for Reliance share price stands at ₹3300 revised higher from ₹3200 earlier.

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