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RIL Q1 preview: Healthy YoY growth in overall revenue, PAT; retail, refining business may show COVID-related stress

RIL will declare Q1 results today. While Kotak estimates adjusted PAT to grow 24.7% YoY, Motilal Oswal puts it at 23.8%. Investors will be keen to see to what extent COVID-related macro headwinds had dented the retail and refining business.

July 23, 2021 / 08:39 AM IST
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Even though the impact of the second wave of COVID-19 will be seen on its retail and refining business sequentially, the June quarter results of Reliance Industries (RIL) may be a healthy one on a year-on-year (YoY) basis, with revenue jumping as much as 80 percent.

The oil-to-telecom conglomerate will announce its Q1FY22 results on July 23.

The company’s retail and telecom businesses flourished in FY21, despite COVID-led disruptions, thanks to its aggressive growth philosophy, which mitigated the impact of the pandemic on the overall business and provided the much-needed capital raise and deleveraging.

Investors will be keen to see to what extent COVID-related macro headwinds had dented the retail and refining business of the company in the June quarter.

Kotak estimates adjusted PAT to grow 24.7% YoY

The estimates of Kotak Institutional Equities shows an 80.4 percent YoY jump in net sales while adjusted PAT may grow 24.7 percent YoY.

EBITDA may see a growth of 38.7 per cent YoY, but EBITDA margin may fall 443 bps, Kotak said.

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“We expect EBITDA for Jio to remain steady quarter-on-quarter (QoQ) as a rise in subscriber base to 43.12 crore (up 50 lakh QoQ) will be offset by a moderation in ARPUs to Rs 135 per month, and retail to decline sharply QoQ, reflecting the impact of lockdowns," said Kotak.

The brokerage firm expects an 8 percent sequential increase in standalone EBITDA, driven by higher margins from downstream business and an increase in contribution from the upstream segment.

Adjusted PAT may climb 23.8% YoY: Motilal Oswal

Brokerage firm Motilal Oswal Financial Services expects consolidated EBITDA at Rs 22,800 crore, up 35 per cent YoY, led by the growth in the O2C (oil-to-chemical) business, while the retail business is likely to see a dip due to the second wave of COVID-19.

Motilal Oswal expects O2C EBITDA at Rs 10,800 crore, up 51 per cent YoY and RJio EBITDA at Rs 8,300 crore, up 18 per cent YoY. Retail EBITDA may come at Rs 1,700 crore, up 92 per cent YoY, said the brokerage firm.

As per the estimates of Motilal Oswal, RIL's Q1 net sales may rise 55 per cent while adjusted PAT may climb 23.8 per cent YoY.

Brokerage firm Emkay Global Financial Services expects a 60.6 per cent YoY jump in net sales of RIL, while PAT may rise 31.3 per cent YoY.

EBITDA may climb 39.1 per cent YoY but EBITDA margin may fall over 200 bps.

In its 44th annual general meeting (AGM) on June 24 this year, the company's chairman Mukesh Ambani made a number of announcements across its telecom, retail and O2C business segments.

Also Watch | What to expect from RIL's Q1 report card

Ambani said that after a record fund-raising round, RIL has a “strong balance sheet with high liquidity” that will support growth for its businesses.

He announced the launch of a new energy business in 2021 with the aim of bridging the green energy divide in India and the rest of the world.

The consolidated revenue of the company during financial year 2020-21 was Rs 5,40,000 crore and consolidated EBITDA was at Rs 90,000 crore, of which nearly 50 percent was contributed by consumer business. The overall growth in net profits was recorded at Rs 53,739 crore, a 34.8 percent increase from last year.

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first published: Jul 23, 2021 08:39 am