Reliance Industries Q4 Review- Record Earnings To Close Out FY24; Risk-Reward Seems Balanced: ICICI Securities

ICICI Securities Report

Reliance Industries Ltd. reported 11%/-2% YoY growth in Ebitda/net earnings in Q4 FY24 (FY24 Ebitda/profit after tax of Rs 1,622 billion/Rs 696 billion grew 14.1%/4.4% YoY).

YoY performance was strong across segments, but QoQ, retail and upstream saw declines. Sequential improvement was driven by higher oil-to-chemical volumes/margins. Capex for Q4 dipped to Rs 230 billion, but FY24 capex of Rs 1.3 trillion is still material.

While earnings performance is strong and gradual commissioning of New Energy facilities (starting H2 FY25E) will be an added driver, returns ratios and free cash flow yields remain muted and valuations seem to adequately factor in the upsides of steady earnings per share growth (compound annual growth rate of 9.4/11.6% in consolidated Ebitda/PAT over FY24–26E). Reiterate Hold, with a target price of Rs 2,810.

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