RIL Q1- Disappointment on New Generation Business

By Research Desk
about 2 months ago

Reliance Industries (RIL) has again disappointed with its flat to dull Q1FY 22 numbers, practically on all segments. We have analysed the results on QoQ, as last year's Q1 was seen impacted due to Covid 19.

> Consolidated PAT for Q1 FY22 fell to Rs. 12,273 cr, from Rs. 13,227 cr in Q4 of FY21.

> This is inspite of OI rising to Rs. 4,219 cr, in Q1, against Rs. 3,237 cr QoQ.

> Even interest income rose to Rs. 2,567 cr in Q1 against Rs. 2,241 cr, QoQ.

> Gross Debt rose to Rs.2,53,855 cr as at 30-6-21, against Rs. 2,51,811 cr on 31-3-21. This is inspite of Rs. 13,215 cr, received in Q1, towards first call of Rs. 314.25 per Rights Equity, as also, PAT of Rs. 12,273 cr of Q1. This implies that company is having net debt of about Rs. 22,500 cr, as at 30-6-21. Cash & Cash equivalent of Rs. 2,57,716 cr as at 30-6-21, includes final call of Rs. 26,500 cr.

> Retail segment EBIT sharply fell to Rs. 1,454 cr in Q1 from Rs. 3,113 cr QoQ.

> Fin Services segment EBIT fell to Rs. 132 cr in Q1 from Rs. 144 cr QoQ.

> ARPU in Q1 was seen stagnant at Rs. 138.40 against Rs. 138.20 of Q4. Smartly, this was not referred by RIL in its Investor Presentation and Press Release.

> Income tax (excluding Deferred Tax) in Q1 is at 13.46%, which was at 3.97% in FY21. So, from hereon FY22 will have higher tax impact as well.

> Q1 EPS at sub Rs. 19 is lower than Q4 EPS, which was at Rs. 19 plus. Even FY 22 EPS may be seen lower than EPS of Rs. 75, of FY21.

This result will have an adverse impact on the share price, as FIIs will be disappointed to see new generation business viz. Retail doing miserably poor, while stagnation seen in Jio, in which RIL, as such has two third beneficial interests only. 

Share ruling at Rs. 2,100 plus may slide to sub Rs. 2,000 in this month itself.

This is not a sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.

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