The oil-to-telecom conglomerate's gross sales for the quarter came in at Rs 2.43 trillion, up 53 per cent over the year-ago period. Consolidated PBIDT (profit before interest, depreciation and tax) jumped 45.9 per cent YoY to Rs 40,244 crore in Q1, beating the estimate of Rs 38,474 crore.
Results were below estimates on account of lower than expected O2C profitability. O2C Ebitda stood at Rs 19,888 crore, up 62.6 per cent YoY. However, it was lower than estimated owing to higher crude purchasing and operating costs as per our understanding, ICICI Securities said.
"In Q2FY23E-TD, global refining margins dipped from peaks witnessed in Q1FY23. Also, imposition of windfall tax on fuel exports will limit the refining profitability. The company has a relatively strong balance sheet and investment in new energy verticals will be key monitorable, going ahead," the brokerage firm said in a note.
The management believes that recovery in aviation demand, subsiding pandemic woes and lower exports from China will underpin product margins going forward. Although, PX, PTA and MEG margins are forecasted to be range bound due to capacity overhang, Polyester/ Polymer demand are likely to improve in the upcoming festive season.
"Using SOTP, we value the Refining and Petrochemical segment at FY24E EV/EBITDA of 7.5x, arriving at a valuation of Rs 721/share for standalone business. We ascribe an equity valuation of Rs 960/share to RJio and Rs 1,173/share to Reliance Retail, factoring in the recent stake sale. Our higher EV/EBITDA multiples of 39x for Retail and 18x for Digital Services underscore new growth opportunities in the Digital space and steady market share gains," Motilal Oswal Financial Services said in a result update.
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