RIL shares slide nearly 3% on disappointing Q1; fall 12% in 4 sessions

Shares of Reliance Industries (RIL) dropped nearly 3% on Monday after billionaire Mukesh Ambani-led conglomerate reported lower-than-expected earnings in the first quarter ended June 2023. The index heavyweight has corrected as much as 12.4% in the last four sessions, from ₹2,820.45 at the end of trade on July 18, to ₹2,469.75 today. However, it is to be noted that the RIL share price was revised to ₹2,580 in the special pre-opening session on July 20 after Jio Financial Services (JFSL) was listed as a separate entity on the domestic bourses. On July 19, the stock had settled at ₹2,841.85 per share on the NSE.

On Monday, RIL shares opened lower at ₹2,481 against the previous closing price of ₹2,538.75 on the NSE. Extending opening losses, the stock declined as much as 2.7% to hit a low of ₹2,469.30, with more than 53 lakh shares worth ₹1,322 crore changing hands over the counter on the NSE.

On the BSE, the RIL share price tumbled as much as 2.6% to ₹2,469.55 after opening lower at ₹2,484 against Friday’s closing price of ₹2,536.20. The market capitalisation slipped to ₹16.93 lakh crore as 1.16 lakh shares changed hands over the counter in the first two hours of trade so far.

On July 19, RIL shares touched an all-time high of ₹2,635.17 on the BSE, while the market capitalisation climbed to ₹19.21 lakh crore. The stock has lost ₹2.27 lakh crore in the last three trading days amid profit booking after the recent rally. The counter has gained nearly 23% in the last four months from its 52-week low of ₹2,012.14 touched on March 20, 2023, as investors rushed to buy RIL shares before the record date of demerger of JFSL (July 20), as they believed it to be a more economical way to buy Jio Financial shares ahead of its listing on the stock exchanges.

RIL shares have delivered a 3.5% return to its shareholders in the last year, while it has risen 3.7% in the six months period. In the calendar year 2023, the counter has fallen 2.7%, while it has given flat returns in the last month. In comparison, the BSE Sensex has risen 19.7% in a year; 9.4% in six months; 9.1% year-to-date (YTD); and 6% in a month.

In a late evening filing on Friday, RIL reported an 11% year-on-year (YoY) fall in consolidated net profit to ₹16,011 crore for the quarter ended June 2023, as compared to ₹17,955 crore in the year-ago quarter. The consolidated revenue from operations dropped 5.3% YoY to ₹2.11 lakh crore in Q1 FY24 compared to ₹2.22 lakh crore in the corresponding quarter a year ago. The EBITDA increased by 5.1% year-on-year to ₹ 41,982 crore, led by consumer and upstream businesses, which offset the decline in oil-to-chemicals (O2C) earnings.

Meanwhile, Reliance Jio, the telecom arm of the Reliance Group, saw its net profit growing by 12% YoY to ₹4,863 crore in Q1 FY24 as against ₹4,335 crore in the same period last year. Monthly churn reduced to 1.8% during the quarter and average revenue per user (ARPU) increased 2.8% year-on-year driven by better subscriber mix and ramp-up of wireline business.

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