Reliance Q2 results today: RIL net profit may fall over 10%, all eyes on Jio ARPU  

The Mukesh Ambani-led Reliance Industries Ltd (RIL) is likely to report a second successive quarter of soft performance, with its net profit likely to drop 11-13 per cent year-on-year (YoY) for the September quarter on a flattish net sales. RIL's upstream business may record a marginal production decline, while a higher profit petroleum share of government may dent margins, analysts warned.

The weak performance at core oil-to-chemicals (O2C) business is likely to be partly offset by healthy performance in consumer-facing businesses, they said adding that all eyes would be on average revenue per user (ARPU) figures post the recent tariff hike.

JM Financial expects Reliance Industries to report profit 11 per cent YoY drop in profit at Rs 15,518 crore compared with Rs 17,394 crore in the same quarter last year. It sees sales at Rs 2,30,715 crore, down 0.5 per cent YoY over Rs 2,31,784 crore in the same quarter last year. JM Financial sees gross refining margin at $7.2 per barrel against implied GRM of $7.7 a barrel in 1QFY25. It sees Jio's ARPU to Rs 194, led by tariff hike and aided by upgrades and one extra day during the quarter.

ICICI Securities also sees RIL to log 11 per cent fall in Q2 profit. It pegged the profit figure at Rs 15,400 crore. This brokerage sees sales rising 4 per cent YoY to Rs 2,40,500 crore.

"We expect net subscribers to be largely flat QoQ for Jio with a 4 per cent higher ARPU at Rs 188.70 owing to tariff hikes. Retail Ebitda should be up 1 oer cent QoQ to Rs 5,700 crore, whereas upstream Ebitda should decline 1 per cent QoQ to Rs 5,100 crore on higher opex. We estimate consolidated APAT (after MI) to also increase 1 per cent QoQ to Rs 15,300 crore," Emkay Global said.

Systematix Institutional Equities in its Q2 preview note expects Reliance’s core O2C business to be affected negatively due to weak refining and petchem business, resulting in 25.9 per cent YoY reduction in O2C Ebitda.

This, it said, will be partially offset by better results in the digital platform business due to the tariff hike and it’s Ebitda is estimated to grow 16.9 per cent YoY.

"We expect ARPU to grow by 5 per cent to Rs 190.80. We anticipate the upstream oil and gas segment to rise 8.7 per cent YoY (flattish QoQ) due to improved production from KG-D6 block," the brokerage said.

Nuvama estimated 6 per cent YoY fall in RIL’s consolidated Ebitda, mainly hurt by weak O2C, partly offset by healthy performance from the consumer businesses.

"We anticipate O2C Ebitda to fall 27 per cent YoY on weak refining (Singapore GRMs down 62 per cent YoY), weak petchem. O&G Ebitda to rise 4 per cent YoY on 3 per cent YoY production rise. Retail Ebitda to grow 7 per cent YoY on 10 per cent YoY rise in retail area. Jio Ebitda to rise 12 per cent YoY on higher ARPU (up 5 per cent YoY). We are cutting target price for RIL to Rs 3,660 as we factor in recent weakness in O2C segment," it said.

This brokerage sees RIL Q2 profit at Rs 15,120 crore, down 13 per cent YoY. It sees sales at Rs 2,33,484 crore, up 0.5 per cent.

Reliance Industries Ltd is seen announcing the record date for its 1:1 bonus share issue, along with the September quarter results, today. The oil-to-telecom major had announced its sixth bonus issue, the largest-ever in Indian history, on September 5.