“Reliance O2C strong profitable; Russian Crude Impact Limited ‘: Jefferies; Maintains the call “Buy”
The activity of the chemical oil (RIL) of Reliance Industries (O2C) remain resilient with profitability in the first half of financial year 26, the monitoring of 15% in annual sliding, said Jefferies in a new report. The brokerage allocated the force to the firm demand for automobile fuel, in particular diesel, and provides for two -digit growth in the consolidated Ebitda for financial year 26.
Jefferies maintained its note “Buy” on Ril with a price target of 1,670 ₹, which implies an increase of 22% compared to current levels. The company has declared that the action is negotiated with a discount, imputing little value for new energy companies and data center, and expects the multiple EV / EBITDA invert as the visibility of profits improves.
On the concerns of investors concerning Russian crude, Jefferies estimated the advantage for RIL at only around US $ 1 per barrel in refining, resulting at around $ 500 million in annual Ebitda – only 2.1% of the consolidated BAIIA projected for the 2010 financial year. “The advantage of the Russian crude is manageable and not a key engine of profitability.”
European diesel differences remained firm following the EU ban on imports of refined products made from Russian crude. With European inventories lower than the five -year average, reliance has been able to export diesel to the EU, helped by refinery closures, overall a tightening of supply. Meanwhile, petrol margins were supported by American stable stocks.
Jefferies has also reported potential regulatory risks of the Imminent Introduction on JIO, which could invite tariff interventions. However, with improving visibility in O2C, telecommunications and retail activities, brokerage expects consolidated income regularly via fiscal year.
For the future, Jefferies projected the net profit to go from 69,600 crosses to Fy5 to more than 1 Lakh crosses by Fy28, with a climbing BPA from 51.5 ₹ to 76.2 ₹ during the same period.
