The highly diversified conglomerate, Reliance Industries Limited (RIL), under the ownership of billionaire Mukesh Ambani, is gearing up to unveil its financial performance for the quarter concluding on March 31, 2024. The eagerly awaited earnings report is scheduled to be released on April 22nd.
What Experts have to predict regarding the RIL Q4 results?
Analysts from JP Morgan suggest that Reliance Industries Limited (RIL) capitalizes on the upward trajectory of crude prices, leveraging its oil production from fields situated along India’s eastern coastline, among other avenues.
However, despite this favorable aspect, the net profit for the quarter is projected to decline by 5.7%, amounting to Rs 19,299 crore. This decrease is attributed to heightened depreciation expenses and a higher tax rate, as indicated by a survey of brokerage estimates.
Reliance Industries Limited (RIL) is poised to witness a significant surge in earnings from its O2C (Oil-to-Chemicals) segment in the sequential quarter. This rise is anticipated to be driven by improved Gross Refining Margins (GRM), enhanced petrochemical spreads, and increased refining throughput. JM Financial forecasts a sequential increase of 11.8% in RIL’s O2C EBITDA, amounting to Rs 15,700 crore, despite expectations of subdued petrochemical margins during the fourth quarter.
On the other hand, Reliance Jio is expected to maintain its robust trend of subscriber additions in Q4FY24, primarily fueled by the aggressive promotion of its Jio Bharat phone. JP Morgan anticipates stronger subscriber momentum in Q4 compared to the previous quarter, projecting 1.15 crore net additions. However, they expect the Average Revenue Per User (ARPU) growth to remain relatively steady compared to the preceding fiscal third quarter.
Meanwhile, JM Financial predicts Jio to add 1.05 crore net subscribers in the January-March quarter. This quarter marks the eighth consecutive period of net subscriber additions, ranging between 5-11 million per quarter since Q1FY23. JM Financial also suggests a sequential improvement of 0.4% in Jio’s ARPU, reaching Rs 182.5 in 4QFY24.
Analysts anticipate Reliance Retail to maintain its resilient performance in the fourth quarter of FY24. They project a year-on-year increase in retail EBITDA ranging from 21% to 28%, attributed to sustained momentum, higher foot traffic, and expansion in retail space.
Sequentially, JM Financial predicts a modest 0.4% growth in Retail EBITDA, considering the elevated base of Q3FY24.
According to Nomura, core retail revenue for Reliance Retail is estimated to reach Rs 55,700 crore, marking a robust 23% year-on-year increase. Additionally, EBITDA is expected to reach Rs 6,100 crore, reflecting a 28% YoY growth, with segment margins expanding by 10 basis points sequentially to 7.4%.
Shares of RIL today
During the midday trading session on April 22, shares of RIL were exhibiting minimal movement, hovering nearly unchanged at Rs 2,946.25 per share on the BSE. Shortly after the stock market’s opening bell, the stock experienced a brief spike, reaching an intraday high of Rs 2,949.70 per share, before stabilizing.
Last Quarterly results
Reliance Industries witnessed a 10.9% increase in consolidated Profit After Tax (PAT) during the October-December 2023 quarter, reaching Rs 19,641 crore. Comparatively, in the corresponding quarter of 2022, the PAT stood at Rs 17,706 crore.
In the first three quarters of the fiscal year 2023-24 (April-December), the company’s Profit After Tax escalated from Rs 52,443 crore to Rs 57,777 crore.
Regarding consolidated revenue, Reliance Industries saw a 3.2% growth, amounting to Rs 248,160 crore, driven by sustained growth in its consumer businesses. In the same quarter of the previous financial year, revenues totaled Rs 240,532 crore.
What is expected this quarter?
Consolidated revenue is anticipated to rise by 11.4% from the previous year to reach Rs 2.39 lakh crore. EBITDA is forecasted to increase by 9.4% to Rs 42,127 crore, driven by strong growth in the O2C (Oil-to-Chemicals) business. However, net profit for the quarter is expected to decline by 5.7% to Rs 18,248 crore due to increased depreciation expenses and a high tax rate.
Jio is projected to add 1.05 crore net subscribers in the January-March quarter. Reliance Retail is expected to achieve core retail revenue of Rs 55,700 crore, marking a robust 23% year-on-year increase, with EBITDA reaching Rs 6,100 crore, reflecting a 28% YoY growth.
Nuvama Institutional Equities predicts that Reliance Industries Limited’s (RIL) oil and gas EBITDA will experience a substantial increase of approximately 41%. This growth is attributed to heightened production from the KG-D6 block, although it may be partially offset by a 20% decrease in deepwater gas prices.
Centrum observed that earnings for this sector are anticipated to stabilize in the March quarter, primarily due to consistent volumes and pricing. However, RIL’s exploration and production (E&P) business are expected to witness a decline in EBIT due to escalated costs.
