Reliance Industries Ltd is set to report its fiscal fourth-quarter earnings on April 25, with analysts projecting a mixed performance as softness in the oil-to-chemicals and oil & gas segment is expected to be offset by a hike in telecom tariffs and improving retail performance.
A Moneycontrol survey of eight analysts estimates Reliance’s Q4 revenue to be Rs 2.38 lakh crore compared to Rs 2.37 lakh crore in year-ago period. EBITDA is expected to be around Rs 43,491.6 crore, up from Rs 42,516 crore a year ago. Net profit is estimated at Rs 18,820 crore, little changed from Rs 18,951 crore in the year ago. Profit was Rs 18,540 crore in the December quarter.
Elevated feedstock costs, led by a 28 percent increase in ethane prices from the December quarter and stable naphtha rates, alongside flat to declining petrochemical product prices, are expected to compress margins and weigh on the O2C segment’s EBITDA. Weaker oil product cracks are likely to pressure refining margins. Despite this, continued processing of discounted crude from Russia (34 percent), Iraq (18 percent), and Venezuela (6 percent) is expected to support gross refining margins (GRM).
What factors could drive the earnings?
O2C Business: EBITDA is projected to decline by 14 percent from a year earlier and remain flat sequentially, affected by weak product cracks and petrochemical spreads. Benchmark Singapore GRMs have dropped 58 percent from a year earlier, reflecting global softness in product cracks.
Oil & Gas: EBITDA is likely to fall 9 percent from a year earlier and 8 percent sequentially, driven by lower output from the KG-D6 block, although deepwater gas prices have risen 2 percent year-on-year.
Digital Services: Jio’s EBITDA is expected to increase by 16 percent year-on-year and 2 percent quarter-on-quarter, supported by higher ARPU (up 13 percent year-on-year and 1 percent quarter-on-quarter) following the tariff hike, as well as a marginal rise in subscriber base.
Retail Business: The retail segment is forecast to deliver a robust 11 percent year-on-year EBITDA growth on the back of increased store area, better margins, and improved realisations. However, sequential EBITDA may dip by 9 percent due to the tapering off of festive sales and a shorter quarter.
Investors are expected to focus on Reliance’s IPO roadmap, with Jio eyeing a 2025 listing and retail to follow. Investors will also watch for updates on gains from discounted crude processing amid weak product cracks, 5G rollout, retail expansion, and new energy projects, along with commentary on KG-D6 production trends and exploration plans.
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