Reliance Industries Limited (RIL) shares witnessed a 3% drop in Friday’s trading session, significantly impacting the Sensex with a negative contribution of 270 points out of an 810-point decline. The market awaits RIL’s June quarter results, expecting a double-digit decline in profit due to weakness in the oil-to-chemicals (O2C) segment, resulting in a single-digit drop in sales. After the demerger of Reliance’s financial services business, RIL’s weightage in the Sensex reduced to 11.70% from the previous 12.77%, and its weightage in Nifty dropped to 10.03% from 10.92%.
Analysts from JM Financial project RIL’s profit figure at Rs 15,764.90 crore, down 12.2% YoY, with sales expected to be at Rs 2,13,471 crore, down 2.7% YoY. Kotak Institutional Equities foresees RIL’s consolidated profit to decline by 14% YoY to Rs 15,417.70 crore, compared to the previous year’s Rs 17,955 crore for the same quarter. Consolidated sales are estimated to decrease by 4% to Rs 2,09,771 crore, compared to Rs 2,19,304 crore YoY.
Regarding RJio (Reliance Jio), Kotak predicts a 15% YoY increase in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) driven by 90 lakh net additions and a marginal rise in ARPU (Average Revenue Per User) from Rs 179 to Rs 181 in the March quarter. For the retail segment, Kotak expects a 16% YoY growth in EBITDA, driven by increased store footprint. However, in the case of O2C, EBITDA is likely to decline by 8% sequentially due to auto fuel over-recoveries.
BofA Securities estimates RIL’s consolidated profit to be Rs 16,160 crore, reflecting a 10% decline.
On a sequential basis, Prabhudas Lilladher anticipates refining throughput to be around 17 MTPA (Million Tonnes Per Annum), slightly lower than the March quarter’s 17.1 MT. The profitability of the petrochemical segment is expected to improve sequentially due to the recovery in demand post China’s reopening. Additionally, Jio is expected to demonstrate steady performance with a 2.9% QoQ (Quarter on Quarter) revenue growth and a 1.5% QoQ ARPU increase, while the retail segment’s profitability should remain resilient.
