Reliance Industries: One of the two reasons for Reliance Industries Limited's (RIL) recent poor performance - weak refining margins - has improved, brokerage firm JP Morgan said in a report. The report further said that the other reason - weak earnings growth of retail business - is difficult to predict. Reliance's stock is down 22 percent (Nifty down 3.3 percent) from its highest level of July 8. In a market where most stocks are trading well above historical valuations, Reliance's stock looks quite affordable.

What are the three main businesses

The company led by billionaire businessman Mukesh Ambani has three main businesses - oil refining and petrochemicals, retail, and telecom. Of these, retail business and telecom business account for about 50 percent of the total revenue.

JPMorgan estimates that nearly all of its net earnings before interest, tax, depreciation, and amortization (EBITDA) growth over the next three years will come from these two businesses.

Refining margins fall sharply.

The report said refining margins have fallen sharply since June, and the group's retail consumer company (Reliance Retail)'s income growth has been disappointing. According to JPMorgan, refining margins have rebounded recently.

However, concerns remain about the retail business given the impact of quick commerce.

Reliance is working on solar module capacity.

JP Morgan said that some of the initial solar (module/cell) capacities that Reliance is working on are expected to be operational by March. Regarding the listing of Reliance Jio and Reliance Retail, the brokerage company said that due to the recent market weakness and the potentially large size of these issues, it may take time.