RIL Q1 Results LIVE: Reliance likely to post weak earnings as O2C drags; board

Morgan Stanley estimates Reliance Industries to post a sombre quarter overall, with 14% YoY EBITDA and 9% revenue growth. In the telecom segment, it expects Jio to report flattish ARPU QoQ at ₹180, with 8 million subscriber net adds in telecom and flattish EBITDA margins. 

Reliance Industries’ EBITDA and net profit may fall by 0.5% and 19% QoQ, respectively, as per Morgan Stanley estimates. Key to these declines will be lower diesel margins, which are negated by higher chemical margins and lower ethane costs. Consumer retail should see steady on-trend EBITDA growth and some margin expansion.

RIL should see Oil to Chemicals EBITDA decline only slightly, at 4% QoQ, despite the significant correction in refining margins. We estimate RIL’s GRM at $11.5/bbl for Q1FY24 (-15% QoQ), much closer to its peer trend line vs last nine months of relative underperformance, in our view. 

Chemicals EBITDA/ton should improve by 19% QoQ with better PE, PX, PET integrated spreads and the 20% YTD decline in US ethane costs, it said.

Brokerage house Prabhudas Lilladher estimates refining throughput of 17.0 MTPA in Q1FY24 as compared to 17.1 MT in Q4. Petchem profitability will improve QoQ, due to demand recovery post China reopening, it said.

We expect Jio to show steady performance with 2.9% QoQ revenue growth and 1.5% QoQ ARPU hike, while retail segment profitability should be resilient. 

Overall earnings to decrease QoQ due to lower GRMs but recovery in petchem to make up. Jio and retail performance will be steady, it added.

Reliance Jio’s Q1FY24 revenue is estimated to rise 2.3% QoQ to ₹23,900 crore, benefiting from subscriber additions, while ARPU expansion may be limited. EBITDA may grow 2.5% QoQ to ₹12,500 crore while cost continues to rise. Net profit is seen at ₹4,800 crore, up 2.2% QoQ, according to ICICI Securities.

Reliance Jio subscriber growth is expected to accelerate with likely 9 million net additions, however, ARPU growth may be restricted by the adoption of unlimited data by 5G users, said ICICI Securities.

We expect cost inflation to be moderate for RJio as it capitalises the initial 5G-related operating cost, it said.

Reliance Industries Ltd (RIL) share price declined over a percent on Friday ahead of the announcement of June quarter results later today. The stock price fell as much as 1.59% to a low of ₹2,578.10 apiece on the BSE. Read full report here

Reliance Industries share price opened lower ahead of Q1 results today. RIL shares were trading 0.87% lower at ₹2,596.95 apiece on the BSE.

Brokerage firm Nuvama Wealth Management expects RIL’s consolidated EBITDA to decline one per cent YoY and two per cent QoQ on weak O2C, partially offset by strong gas (prices up +22 per cent YoY/flat QoQ), retail and digital. 

The brokerage firm expects RIL’s O2C to remain subdued on weak refining (GRMs down 80 per cent YoY) as well as weak petrochemicals due to weak demand. Weak petrochemicals may be partially offset by a 64 per cent YoY and a 16 per cent QoQ dip in feedstock Ethane price, Nuvama said.

Reliance Jio’s revenue in Q1FY24 is expected to rise 3% QoQ to ₹24,070 crore, while its EBITDA may increase 3% QoQ to ₹12,500 crore, according to Avishek Datta – Research Analyst, Prabhudas Lilladher Pvt Ltd.

He also factored in ARPU of ₹182, up 1.5% QoQ, and subscriber addition of 6 million in Q1FY24.