Reliance Industries Ltd (RIL) Q3 results will be keenly followed later today. The oil-to-telecom major is seen reporting a year-on-year (YoY) degrowth or marginal growth in net profit for the December quarter on a single-digit rise in sales, as analysts believe a strong telecom earnings growth would be offset by weakness in energy and muted retail growth. On sequential basis, the RIL performance is likely to be better, analysts said.
Growth for the consumer-facing business will likely be driven by strong growth for Jio and modest growth for Reliance Retail (RR), said Nomura India.
On a sequential basis, to expects RIL’s consolidated Ebitda to rise 9 per cent sequentially to Rs 42,500 crore, driven by strong growth in Jio, a recovery for O2C and modest retail growth.
"We estimate O2C’s (oil-to-chemicals) Ebitda of Rs 13,600 crore, to rise by 10 per cent QoQ in 3QFY25F, underpinned by an increase in refining margins to $9.3 a barrel, which is partly offset by a moderation in petchem margins," it said. The brokerage sees Jio’s Ebitda at Rs 16,170 crore, up 8 per cent QoQ, underpinned by a sharp uptick in ARPU to Rs 208 per month and a recovery in subscriber addition. It sees core retail Ebitda of Rs 6,380 crore, up 5 per cent QoQ.
Analysts believe further clarity on Rs 75,000 crore announcements in the new energy business, growth in retail store additions and any pricing action in telecom would be keenly watched.
On YoY basis, Antique Stock Broking sees Q3 profit falling 4.6 per cent to Rs 16,475 crore on 5.4 per cent rise in sales at Rs 2,44,248 crore. Nuvama Institutional Equities sees RIL's Q3 profit falling 4.7 per cent to Rs 16,461 crore. Sales are seen rising 3.7 per cent to Rs 2,33,338 crore. For Jio, this brokerage sees higher average revenue per user but muted subscriber additions. For retail, Ebitda may grow report 1 per cent YoY on higher footfalls and 7 per cent YoY increase in revenue per square foot. Oil to chemicals ( O2C) Ebitda is seen falling 10 per cent YoY, but rising 2 per cent QoQ due to recovery in refining margins.
MOFSL sees profit rising to a mere 2.9 per cent YoY to Rs 17,700 crore on 2.5 per cent rise in sales at Rs 2,30,800 crore.
"RIL may see flat consolidated Ebitda YoY (up 2 per cent YoY), due to a 24 per cent drop in standalone Ebitda (refining, petchem and E&P), but offset by an Ebitda growth of 17 per cent in retail and 16 per cent in digital services (telecom)," Elara Securities said. This brokerage sees RIL's net profit rising 5.6 per cent YoY to Rs 18,239 crore on 8.7 per cent rise in sales at Rs 2,44,587 crore.
YES Securities said refining margins are expected to improve sequentially, driven by strengthening product cracks. The digital services segment remains a growth driver, with ARPU likely to trend higher as tariff hikes gain traction. Additionally, the retail segment is anticipated to achieve and reach its record-high Ebitda of Q3FY24, benefiting from sustained expansion (higher private label sales) and strong consumer demand, thereby contributing to overall better profitability.
Goldman Sachs expects RIL’s Q3 core Ebitda to grow 5 per cent sequentially, but to remain largely flat YoY. It forecast Q3FY25E revenues of Rs 30,100 crore, up 6 per cent QoQ or 19 per cent YoY, for Jio Infocomm. It sees reported ARPU of Rs 209 in Q3 against Rs 195 in Q2. For Reliance Retail, it sees 5 per cent YoY sales growth including connectivity. It sees a flattish YoY sales growth excluding connectivity.
"We expect Energy Ebitda to remain flat sequentially as gains in refining earnings are offset by weaker petchem earnings. On refining, we expect a sequential growth in net GRM to $8.7 per barrel in Q3 (up 6 per cent QoQ) driven by better ex-China supply-demand dynamics and a more favourable cost base," it said. On petchem, Goldman Sachs sees a longer recovery trajectory for margins due to unresolved supply and demand issues for olefins and certain aromatics where RIL has higher exposure.
"However, we expect RIL to continue outperforming industry margins, driven by a significant cost curve advantage vs. naphtha-based peers driven by low US ethane gas price (down 62 per cent from peak in June 2022).