The Mukesh Ambani-led Reliance Industries Ltd is expected to clock a flattish year-on-year (YoY) profit for the December quarter on 8-12 per cent jump in sales. Analysts said Reliance Jio may see subscriber addition of 1-1.2 crore against 1.1 crore in the September quarter. Blended average revenue per user (ARPU) is seen improving, but marginally to Rs 183. An increase in store footprint, higher footfalls and benefits of operating leverage may aid Reliance Retail numbers.
While consumer-focused businesses are expected to do well, weakness in oil-to-chemical (O2C) segment due to moderation in diesel cracks, narrowing of Russian crude discount, lower refining throughput and continued weakness in petchem margin would drag numbers.
RIL's profit for the quarter is seen rising 1.5 per cent YoY to Rs 16,036.40 crore from Rs 15,792 crore in the corresponding quarter last year, said Systematix Shares and Stocks. This broking firm sees revenue for the quarter climbing 12.2 per cent YoY to Rs 2,43,625 crore from Rs 2,17,164 crore in the corresponding quarter last year. Kotak Institutional Equities sees profit rising 3 per cent YoY to Rs 16,217 crore on 8 per cent rise in sales at Rs 2,34,641 crore. Prabhudas Lilladher sees flattish bottom line for the quarter at Rs 15,790 crore on a 10.2 per cent jump in top line at Rs 2,39,270 crore.
Reliance Industries' operating performance may improve, thanks to improving margin, said Prabhudas Lilladher, which expects margin for the quarter to improve 62 basis points sequentially to 16.9 per cent. On YoY basis, margin is seen falling 81 basis points. Systematix Shares and Stocks pegs Ebitda margin at 16.4 per cent. This would be against 17.7 per cent in the September quarter and 16.2 per cent in the year-ago quarter.
"We expect consolidated Ebitda to decline 2 per cent QoQ (up 13 per cent YoY). With weak refining/petchem, flat E&P (lower HPHT price, offset by lower costs), we expect standalone Ebitda to decline 9 per cent QoQ (up 16 per cent YoY)," Kotak said.
Kotak Institutional Equities said Ebitda for Reliance Jio may rise 3.5 per cent sequentially, on account of 1.2 crore additions in subscribers. This brokerage expects the blended ARPU to improve to Rs 183 from Rs 182 in the September quarter on increasing FTTH contribution. For Reliance Retail, Kotak expects Ebitda to rising 6 per cent QoQ, driven by increased store footprint, higher footfalls and the benefits of operating leverage.
Emkay Global expects Reliance Jio to come up with a subscriber addition of 1.05 crore, with a 0.5 per cent higher average revenue per user (ARPU) Rs 182.50. BNP Paribas, meanwhile, said data volume growth will continue to be led by sports events and improving fixed broadband connections.
"We estimated 1 per cent rise in ARPU to Rs 183.50 in Reliance Jio business while a strong 400 new retail outlets, along with 8 per cent Ebitda margin at retail division in Q3FY24 against 7.7 per cent in Q3FY23," Systematix Shares and Stocks said.
In the case of upstream businesses, Kotak said E&P’s EBIT would likely be flat sequentially, despite 18 per cent cut in HPHT gas ceiling prices on moderation in opex from elevated levels in Q2FY24. Lower gross refining margin (GRM) and petchem margin are expected to result in a fall of 12 per cent in O2C profits, analysts said.
"We anticipate O2C Ebitda to remain flat YoY on weak refining (GRMs down 14 per cent YoY/43 per cent QoQ) and weak petchem demand offset by a 41 per cent YoY dip in ethane prices," Nuvama said in a note. Prabhudas Lilladher estimated refining throughput at 17 mmtpa. "Petchem profitability will decline QoQ. Refining margins too are expected to decline due to fall in Singapore GRM," it said.
Motilal Oswal Securities said traders and investors would keenly follow any "clarity on the proposed Rs 75,000 crore announcements by RIL in the new energy business.” Besides, it the brokerage expects the growth in retail store additions and any commentary on pricing action in the telecom segment will be tracked keenly.
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