Shares of Reliance Industries fell over 2 percent after the company reported its June quarter earnings with a sharp fall in consolidated revenue but a robust 31 percent YoY rise in net profit helped by a one-time gain on investment by Britain’s BP in its fuel marketing business—Reliance BP Mobility Services. The RIL stock fell 2.62 percent to an intraday low of Rs 2,053.30 on the BSE. At 11 am, the stock traded 1.21 percent lower, quoting at Rs 2,083.05 on the BSE.

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The energy-to-digital conglomerate reported a 31 percent year-on-year rise in consolidated net profit at Rs 13,248 crore for the quarter ended June 30, 2020, as against Rs 10,104 crore, YoY, despite the disruption caused in the wake of the COVID-19 pandemic. The number was ahead of street expectations.

Consolidated income from operations for the quarter stood at Rs 91,238 crore compared to Rs 1,62,353 crore during the same period last year. Gross revenues stood a little over Rs 1,00,000 crore.

The company's technology arm Jio Infocomm reported a strong performance Average Revenue Per User (ARPU) coming in at Rs 140. Jio’s revenue rose 34 percent to Rs 19,513 crore, EBITDA spiked 55 percent year-on-year to Rs 7,281 crore, and net profit nearly trebled to Rs 2,520 crore.

“Adjusted PAT came in marginally higher than estimates helped in part by higher other income and lower tax during the quarter. Both refining and Petrochemicals business performed well at the operating profit level due to optimized crude procurement, relatively higher utilization, cost management and agile product placement. Reliance Retail's topline performance was resilient considering the adverse operating environment. Reliance Jio’s performance was broadly in line but the ARPU at Rs 140 surprised positively,” said Deepak Jasani, Head Retail Research, HDFC Securities on Reliance Industries.

Goldman Sachs maintained a 'buy' rating and sees more upside in the stock in the near future. It said the company’s Q1 earnings were in-line with estimates and outperformed versus peers in a subdued quarter.

“Weaker energy was offset by stronger than expected retail performance. Both retail and energy saw EBITDA declines due to local/global lockdowns. Telecom EBITDA grew 50 percent YoY on tariff hikes and higher data consumption,” the global research house said.

It expects EBITDA to double by FY25 driven by hyper-growth from consumer businesses.

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