Fall in Reliance Industries shares may offer an opportunity for long-term bulls

RIL's net profit for the April-June period jumped nearly 11 percent to Rs 17,955 crore boosted by growth across segments. Reliance's oil-to-chemicals (O2C) business clocked a record quarterly revenue of Rs 2.19 lakh crore for the three months to June in a volatile environment, as against Rs 2.07 lakh crore for the previous quarter.

RIL's refining margin — or the amount by which revenue from sales exceeds costs — improved by 220 basis points to 17.3 percent for the three-month period.

RIL's telecom arm, Reliance Jio Infocomm, reported a 23.82 percent jump in net profit to Rs 4,335 crore for the quarter ended June. Its average revenue per user (ARPU) — a key measure of profitability for telecom companies — improved to Rs 175.7 in the June quarter compared with Rs 168 in the previous three months, driven by the residual impact of tariff hikes and contribution from fibre to the home (FTTH).

Jio numbers are pretty good and better than the Street expectations, said Naveen Kulkarni, CIO of Axis Securities.

"We were expecting around six million subscribers to be added in this case quarter. With the ARPU improvement, I think the numbers look better than our expectations," Kulkarni told CNBC-TV18.

RIL's retail arm, Reliance Retail Ventures, reported a 114.2 percent year-on-year (YoY) jump in net profit to Rs 2,061 crore for the quarter ended June 30, 2022. Reliance Retail's gross revenue stood at Rs 58,554 crore for the first quarter of the year ending March 2023, registering a growth of 51.9 percent on year.

On Reliance Retail, Diwan said, "We have actually gone ahead and upgraded our numbers."

Meanwhile, experts reckon that the next big trends to watch out for the RIL stock price will be the upcoming 5G spectrum auctions and the company's 45th AGM.

"From a near-term stocks perspective, the conclusion of spectrum auctions is the key target to look at. Reliance's AGM is the key milestone for the stock’s performance. Last two-three AGMs have been very eventful, whereby the Chairman has outlaid the capital allocation plan for each of the businesses and how value will be unlocked. And to that extent, essentially, given the management changes that have happened at the subsidiary level, all eyes will be on essentially the potential announcement towards demergers and listing of these individual businesses, which will be keenly watched," said Harshvardhan Dole, Vice President-Institutional Equities at IIFL.

JPMorgan has a target price of Rs 3,170 for the RIL stock, which implies an upside of 26 percent from the current market price. The brokerage has an 'overweight' rating on the stock and expects the year ending March 2023 to be a strong one for the company on the earnings front.

Macquarie lowered its target price for Reliance shares to Rs 2,000 with an 'underperform' rating. The brokerage said that the company's solid operational performance was boosted by its refining margin and gas prices.

Credit Suisse has a 'neutral' rating with a target price of Rs 2,510. The next event for the stock is the RIL AGM, according to the brokerage, which expects more disclosures on the company's new energy and financial services businesses.