Reliance Q3 results today: Telecom, retail may boost earnings; refining, petchem to remain muted

Reliance Industries Ltd (RIL) is scheduled to report its earnings for quarter ended December 31, 2019 on Friday. The oil-to-telecom conglomerate is likely to report a flat to moderately higher consolidated profit on a year-on-year basis. RIL is expected to post healthy figures in the consumer, telecom and retail segments, while the company's performance in refining and petreochemical business is estimated to remain muted.

Sequentially, the profit and operating income may report robust growth in the range of Rs 11,700 crore, rising 4%. Revenues of the Mukesh Ambani-led conglomerate are likely to decline 5.5% on annual basis to Rs 1.51 lakh crore, but overall consolidated revenue for the quarter could rise sequentially in the range of 2-7%, quoted HDFC Securities.

For the quarter ended December 2018, the company had reported a consolidated net profit of Rs 10,251 crore and revenue of Rs 1.71 lakh crore.

Analysts expect RIL's Q3 gross refining margin (GRM), the amount a company makes by converting a barrel of crude to fuel, for the quarter in the refining business to around $8.5-$9 per barrel against $9.4 recorded in September quarter. Retail revenues may grow 8.5% on a quarterly basis while margin may improve 10 bps to 5.7%.

Reliance Industries' earnings before interest, tax, depreciation and amortisation (EBITDA) margin is estimated to improve 120 bps YoY to 14.5%. As per analysts, the petchem and refining business segments contribute 60% to overall consolidated EBITDA. Petchem EBITDA is expected to fall 5.5% QoQ to Rs 827.2 crore due to lower polymer spreads this quarter, quoted, HDFC Securities in its oil & gas, chemicals 3QFY20E results preview.

Standalone EBITDA is expected to increase sequentially, led by higher refining margins at $10.5 a barrel as the average Brent prices stood at $62.5 in Q3 FY20, marginally higher than the average price of $61.9 in Q2 FY20.

Reliance Jio's rising net profit and increasing stature in the industry may help it post 40% growth in profit after tax (PAT) to Rs 1,430 crore sequentially. Jio's ARPU is expected to increase by 5% to Rs 125.

Jio's EBITDA may rise 12-14% QoQ, aided by recovery of interconnect charges from users and uptick in ARPU after the December 2019 tariff hike.

Reliance Jio Infocomm Ltd added 56 lakh mobile subscribers in November, taking its total user base to 369.93 million, and making it the number one telecom operator in India by both subscriber base as well as revenue market share, as per data released by the Telecom Regulatory Authority of India (TRAI) on Thursday. With this, Jio holds a 32.04% share in the more than 1.15-billion-user Indian mobile services market.

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