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Reliance Q4 results preview: All eyes on retail & Jio growth numbers


Oil-to-telecom behemoth Reliance Industries (RIL) will report its March quarter results on Thursday. Market experts see flattish profit growth and lower petchem earnings due to weak margins.

Retail may continue to report strong growth while telecom arm Jio may witness margin decline in average revenue per user (Arpu) on a sequential basis.

Brokerage Emkay Global Financial Services sees 3.30 per cent year-on-year (YoY) rise in profit at Rs 9,767.30 crore on 20 per cent year-on-year jump in sales at Rs 1,40,263.10 crore. It also sees 7 per cent quarter-on-quarter (qoq) dip in gross refining margin (GRM) to $8.2 per barrel.

“We see lower petchem earnings due to margin weakness. Retail EBIT to grow by 8 per cent QoQ and Jio is expected to see 307 million subscribers. The telecom arm may report a slight decline in Arpu QoQ to Rs 129,” Emkay said in a report.

Arpu stood at Rs 130 in Q3FY19.

On the other hand, an assessment by Sharekhan showed that earnings of RIL to be impacted by weakness in refining margin and appreciation of Indian rupee partially offset by an improvement in LLDPE (Linear low-density polyethylene) and PVC margins.

It expects GRM of $7.4 per barrel in Q4FY2019 against $8.8 per barrel in the sequential quarter ended December 2018.

Market participants should focus on the margin outlook of refinery and petchem business.

Equirus Securities projected 4.20 per cent and 1.90 per cent year-on-year rise in net profit and EBITDA on 23.5 per cent increase in net sales. However, it sees 277 basis points YoY fall in EBITDA margin at 13 per cent. The brokerage firm expects a GRM of $8.30 per barrel due to decline in cracks.

According to Edelweiss Securities, lower refining throughput (down 7% QoQ), GRM (down 9 per cent QoQ), lower PE cracks will lead to lower earnings at refining and petchem. However, this will be offset by higher earnings at telecom and retail (over 10 per cent QoQ). Interest costs are expected to remain flat QoQ leading to overall earnings declining by 5.4 per cent QoQ. However, it sees 2.80 per cent rise in core PAT on YoY basis.

Shares of Reliance Industries settled 0.41 per cent up at Rs 1,345.30 on April 16.

Source: Economic Times