Synopsis:
The upcoming Reliance Industries Limited (RIL) Q3 results announcement on January 19 is anticipated to reveal key insights into various aspects of the company's performance. ICCBizNews highlights five crucial elements to watch out for in the report, including Jio's Average Revenue Per User (ARPU), Reliance Retail store additions, and other significant metrics. The article aims to provide investors and stakeholders with valuable insights into RIL's financial performance and business operations.
RIL's operating performance is likely to improve amid improving margin, said Prabhudas Lilladher. This brokerage sees margin at 16.9 per cent, up 62 basis points sequentially but down 81 basis points YoY.
Reliance Industries Ltd is all set to announce its quarterly results on Friday. If analysts were to go by, the oil-to-telecom major may report a nil to 1.5 per cent rise in profit for the December quarter on a double-digit rise in sales. Weakness in oil-to-chemical (O2C) due to moderation in diesel cracks and narrowing of Russian crude discount
and lower refining throughput due to maintenance shut-down and continued weakness in petchem margin are largely seen offset by steady growth in consumer businesses namely Reliance Jio Infocomm and Reliance Retail.
RIL Q3 sales, profit
Systematix Shares and Stocks expects RIL to report 1.5 per cent year-on-year rise in net profit at Rs 16,036.40 crore for the December quarter compared with Rs 15,792 crore in the same quarter last year. It sees sales for the quarter coming in at Rs 2,43,625 crore, up 12.2 per cent YoY over Rs 2,17,164 crore in the same quarter last year.
Prabhudas Lilladher also sees flattish profit at Rs 15,790 crore on a 10.2 per cent rise in sales at Rs 2,39,270 crore.
Operating performance
RIL's operating performance is likely to improve amid improving margin, said Prabhudas Lilladher. This brokerage sees margin at 16.9 per cent, up 62 basis points sequentially but down 81 basis points YoY. Systematix Shares and Stocks sees Ebitda margin at 16.4 per cent against 17.7 per cent in September and 16.2 per cent in the year-ago quarter.
As far as Ebitda is concerned, "We expect consolidated Ebitda to decline 2 per cent QoQ (up 13 per cent YoY). With weak refining/petchem, flat E&P (lower HPHT price, offset by lower costs), we expect standalone Ebitda to decline 9 per cent QoQ (up 16 per cent YoY)," Kotak said.
Jio, retail businesses
Emkay Global expects Jio to suggest a subscriber addition of 1.05 crore, with a 0.5 per cent higher average revenue per user (ARPU) Rs 182.50. Data volume growth will continue led by sports events; and rising fixed broadband connections, said BNP Paribas.
"We have estimated 1 per cent rise in ARPU to Rs 183.50 in Jio telecom business while a strong 400 new retail outlets along with 8 per cent Ebitda margin at retail division in Q3FY24 vs 7.7 per cent in Q3FY23," Systematix Shares and Stocks said.
Kotak Institutional Equities expects Ebitda for Reliance Jio to increase 3.5 per cent sequentially, driven by 1.2 crore overall net additions while it sees blended ARPU improving to Rs 183from Rs 182 QoQ on rising FTTH contribution. For Reliance Retail, it said it sees Ebitda to increase 6 per cent QoQ, driven by increased store footprint, higher footfalls and the benefits of operating leverage
O2C, upstream biz update
Kotak said E&P’s EBIT would likely be flat sequentially, despite 18 per cent cut in HPHT gas ceiling prices on moderation in opex from elevated levels in Q2FY24. Lower gross refining margin (GRM) and petchem margin are expected to result in a fall of 12 per cent in O2C profits, analysts said.
"We anticipate O2C Ebitda to remain flat YoY on weak refining (GRMs down 14 per cent YoY/43 per cent QoQ) and weak petchem demand offset by a 41 per cent YoY dip in ethane prices," Nuvama said in a note. Prabhudas Lilladher estimated refining throughput at 17 mmtpa. "Petchem profitability will decline QoQ. Refining margins too are expected to decline due to fall in Singapore GRM," it said.
Clarity on Rs 75,000 crore new energy biz
Motilal Oswal Securities said investors would keenly follow any further clarity on the proposed Rs 75,000 crore investments announced by Reliance Industries in the new energy business. Besides, it feels the growth in retail store additions and any commentary on pricing action in the telecom segment will be watched keenly.
