Reliance Industries to announce Q4 results today: RIL petchem margins may be weak, Jio profit to rise

Reliance Industries Limited (RIL) is scheduled to announce the standalone and consolidated financial results today for the quarter and year ended March 31, 2020. RIL's consolidated net sales may stand at Rs 1.39 lakh crore and net profit is estimated at Rs 10,429 crore, according to a Bloomberg survey.  RIL's petchem margins are likely to be under pressure amid the ongoing supply glut in the oil market, analysts said. In a report released on April 17, analysts at CLSA said that it expects a decade-low refining and petchem margins in FY21 due to the global growth slump amid coronavirus crisis. The petchem volume may see a 10 per cent year-on-year reduction, it added.

RIL's revenues would grow 11.8 per cent year-on-year and 1.3 per cent sequentially to Rs 154,958.6 crore, analysts at Kotak Securities said. The profit after tax (PAT) would rise at Rs 10,009 crore, down 3.4 per cent year-on-year and 14 per cent sequentially, the report added.

"We expect RIL's EBITDA to decline by 11.9% QoQ to Rs 113.45 bn owing to 13% fall in GRM to USD 8.0/bbl vs. USD 9.2 in 3Q and decline in petchem margins. GRM should be at ~USD 8.0/bbl (vs 9.2 in 3QFY20) owing to fall in middle distillate spreads QoQ," HDFC Securities said in a report. In Q3FY20, the oil-to-telecom conglomerate had reported a consolidated net profit of Rs 11,640 crore and revenue of Rs 168,858 crore.

However, RIL's telecom arm Jio may not be affected much in the current scenario, analysts said. "We raise our ARPU estimates for FY20/21/22E by 10/7/15% resp, owing to the recent tariff hike taken by Reliance Jio. Consequently, the EV of RJio jumps by 15.4% to Rs 5.5 lakh crore," HDFC Securities said.

In the March 30 report, Credit Suisse said, "We are still positive on continued price increase in the sector and strong subscriber addition. We estimate Jio ARPU to increase to Rs 180 in FY22 and subscriber base to reach 500 mn by end of FY22."

Meanwhile, the RIL board is also expected to announce a  decision on a proposal to issue equity shares to existing shareholders on a rights basis during a board meeting on April 30. It will also recommend dividend on the equity shares.  Shares of RIL were trading at Rs 1,486, or up 59.05 points, or 4.14 per cent on NSE at the time of reporting.

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