Reliance Industries Limited (RIL) shares took a hit on the stock market today, following the release of its second-quarter financial results. The conglomerate’s numbers fell short of analyst expectations, leading to a decline in its stock price.
RIL’s consolidated net profit for the quarter ended September 30, 2024, stood at ₹12,312 crore, down 15.6% year-on-year. Revenue from operations declined 12.3% to ₹1.98 lakh crore. The disappointing results were primarily attributed to weaker refining margins and subdued growth in the company’s petrochemicals business.
Weaker refining margins were a significant contributor to the decline, primarily due to softening global demand, increased competition from Asian refineries, and higher crude oil prices. Additionally, the company’s petrochemicals segment experienced subdued growth, impacted by weak demand from end-user industries, higher feedstock costs, and intensifying competition.
RIL shares opened at ₹2,344.90 on the BSE and slid to an intraday low of ₹2,281.50, before closing at ₹2,293.20, down 2.2% from the previous close. Brokerages have revised their target prices for RIL shares, factoring in the company’s Q2 performance. CLSA reduced its target price to ₹2,500 from ₹2,700, while Morgan Stanley lowered its target price to ₹2,400 from ₹2,600, and Goldman Sachs cut its target price to ₹2,300 from ₹2,500.
RIL’s management remains optimistic about the company’s long-term prospects, citing strong growth potential in the retail and digital services segments, increasing focus on renewable energy and new energy initiatives, and plans to expand its presence in the global market.
The stock price decline had a ripple effect on the broader market, with the Nifty Energy index falling 1.5%, Sensex declining 0.8%, and BSE Oil & Gas index slipping 1.2%. Investors will closely watch RIL’s efforts to revitalize its refining and petrochemicals business, while also monitoring the company’s progress in its growth areas.
Analysts expect RIL to take strategic measures to address its refining and petrochemicals challenges, including diversifying its revenue streams, enhancing operational efficiency, and investing in emerging technologies. RIL’s disappointing Q2 results have raised concerns among investors. However, the company’s long-term growth prospects remain intact, driven by its diversified business portfolio and strategic initiatives.
Leave a Reply