Reliance Industries Q4 Preview: Net Profit Expected To Drop, Ebitda Set To Rise

Reliance Industries Ltd.'s fourth-quarter operating profit is likely to increase on strong refining and retail performance even as its net profit is expected to decline.

RIL is expected to report a 7.6% sequential decline and an 18.8% year-on-year fall in its consolidated net profit to Rs 16,442.3 crore for the three-months ended in March, according to an average of analyst estimates tracked by Bloomberg. That's most likely because of the impact of windfall tax.

The consolidated revenue of India's largest company by market value is expected to rise 2.1% sequentially and 8.6% year-on-year to Rs 2.25 lakh crore. The company's operating income or earnings before interest, tax, depreciation, and amortisation is projected to rise by 4.7% sequentially and 17.7% year-on-year to Rs 36,915.8 crore, according to estimates tracked by Bloomberg.

RIL will declare its result on Friday.

Oil-to-Chemicals, Petrochemical Segments

According to a report by ICICI Securities, RIL is expected to see a sharp recovery quarter-on-quarter while year-on-year trends remain muted. The company is likely to see steady improvement across segments with stronger base gross refining margins and relatively lower windfall tax to drive better oil-to-chemicals segment results. However, continued softness in integrated petrochemical spreads will likely offset the refining boost to an extent.

HDFC Securities expects RIL’s consolidated Ebitda to increase to Rs 37,800 crore, up 20% YoY and 7% QoQ. "Oil-to-chemicals Ebitda/tonne of crude processed is estimated to increase by around 4% QoQ, owing to an improvement in petroleum product cracks and an improvement in petchem margins QoQ,” the brokerage said.

"We expect flattish growth in Jio's Ebitda, led by steady 5 million subscriber additions. This will get offset by 1.1% sequential decline in average revenue per user," brokerage firm Jefferies said.

Nomura Global Equity Research expects Jio’s Ebitda to rise 3% sequentially, driven by EoP subscriber additions of 6 million and a modest increase in ARPU to Rs 179.

Kotak Securities said it expects Ebitda for Jio to increase 2% QoQ largely driven by 5.7 million overall net subscriber additions. It expects blended ARPU to be flat QoQ at Rs 178.

Retail

According to Jefferies, retail Ebitda is likely to be up 5% sequentially on strong revenue growth and stable margins.

Nomura estimates RIL’s retail segment Ebitda to increase 5% QoQ to Rs 4,900 crore, benefiting from the robust pace of store additions and operating leverage.