Reliance Jio and Reliance Retail should drive next leg of growth, said Motilal Oswal.
Oil-telecom-to-retail major Reliance Industries, on October 30, is expected to show strong rebound in Q2FY21 sequentially in retail business amid lockdown easing. Meanwhile, Jio is likely to maintain its earnings growth on all parameters with addition of more than 10 million subscribers QoQ.
In fact, all segments are expected to see growth sequentially, except refining, with flat-to-marginal rise in gross refining margins QoQ, while the petrochemical business may show double-digit growth in operating earnings QoQ, brokerages feel.
Gross refining margin in Q1FY21 was at $6.3 per barrel, while the reported profit of Rs 13,248 crore in June quarter was supported by exceptional income of Rs 4,966 crore due to BP stake sale.
"Reliance Jio and Reliance Retail should drive next leg of growth," said Motilal Oswal which expects 29 percent sequential growth in revenue and 8.2 percent QoQ rise in EBITDA (earnings before interest, tax, depreciation and amortisation) in quarter ended September 2020.
Led by one extra day during the quarter and flow-through of December 2019 tariff increase, Dolat Capital expects Jio to report 4.6 percent QoQ growth in revenues led by 3 percent increase in average subscribers and 1.2 percent uptick in average revenue per user (ARPU) to Rs 143, and EBITDA/adjusted profit to increase by 4.4/7.7 percent QoQ.
"We expect higher EBITDA from (1) Jio led by a rise in subscriber base to 410 million (up 12 million QoQ) and ARPU to Rs 144 and (2) retail (up by Rs 540 crore QoQ) led by sequential recovery in revenues," said Kotak Insitutional Equities.
The stock surged 35 percent in current calendar year 2020 and spiked 131 percent from March 23's low. It had touched a life high of Rs 2,369.35 per share and hit a market capitalisation of Rs 16 lakh crore on September 16.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol.