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Reliance Industries Ltd.’s Q1 FY22 recurring earnings per share was up 48% y-o-y (profit before tax up 111%, but tax up 13.3 times on normalisation) driven by rise in Ebitda across segments and halving of interest cost.
Petrochemicals’ Ebitda was at an all-time high, but gross refining margins remain weak.
RIL’s retail Ebitda fell QoQ due to Covid-19 second wave.
Gross refining margin weakness, petrochemical margin fall from peak and a third Covid-19 wave delaying retail recovery may mean more downside to FY22E EPS.
Stock underperformance continues and will continue unless there is a tariff hike, retail growth is back to pre-Covid levels, or GRM recovers.
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