Stock corner: ‘Buy’ Reliance Industries, consumer business drove showing

Reliance Industries (RIL) reported in-line standalone revenue of Rs 871.4 bn (-9% y-o-y, flat q-o-q) in Q2FY20. Ebitda came in at Rs 136.7 bn (-8% y-o-y, flat q-o-q) versus our estimate of Rs 136.4 bn owing to the lower-than-expected refinery throughput of 16.7mmt, despite a better GRM of $9.4/bbl (flat y-o-y, +16% q-o-q). Lower depreciation, combined with higher other income and higher interest cost resulted in a beat of 9% in standalone PAT of Rs 97.0 bn (+10% y-o-y, +7% q-o-q). The company recognised the entire MAT cut in the quarter with an effective tax rate of 20.8% versus 25.4% in Q1FY20.

At the consolidated level, RIL reported Ebitda of Rs 221.5 bn (+5% y-o-y, +4% q-o-q), primarily led by the better-than-expected performance of the digital and retail segments. Higher other income led to consolidated PAT of Rs 113.5 bn (+19% y-o-y, +12% q-o-q. In