RIL Q1 results preview: Profit may fall amid weakness in O2C biz; Reliance Retail, Jio to do well

Reliance Industries Ltd (RIL) is likely to report a single digit drop in net profit for the June quarter, even as its sales may rise 10-12 per cent for the same period. The consumer-facing businesses of Reliance Jio and Reliance Retail may do well but that is likely to be offset by a sharp decline for oil-to-chemical (O2C) business.

Emkay Global expects net profit for RIL to fall 4.6 per cent YoY to Rs 15,279 crore in the June quarter from Rs 16,011 crore in the same quarter last year. Revenue is seen rising 12 per cent YoY to Rs 2,32,499 crore from Rs 2,07,559 crore YoY. Ebitda margin is seen at 16.7 per cent against 18 per cent in March and 18.4 per cent in the year-ago quarter.  The brokerage sees RJio adding 80 lakh subscribers for the quarter sequentially and sees average revenue per user (ARPU) rising 0.6 per cent to Rs 182.70 a month.

"We estimate RIL’s consolidated Ebitda to fall 8 per cent QoQ to Rs 38,900 crore with O2C down 21 per cent to Rs 13,300 crore on lower GRMs. Retail Ebitda should be up 3 per cent QoQ to Rs 6,000 crore, whereas upstream Ebitda should slide 10 per cent QoQ to Rs 5,100 crore on higher opex. We estimate consolidated APAT (after MI) to also decline 19% to Rs153bn

Kotak Institutional Equities sees RIL profit at Rs 15,819 crore, down 1.2 per cent YoY. It sees sales rising 10.9 per cent YoY to Rs 2,30,102 crore. Ebitda margin is seen at 17.1 per cent.

"We expect RIL’s consolidated Ebitda to decline by 8 per cent QoQ, driven by weak O2C performance and muted growth in Digital services and organized retail," it said.

Nomura India said RIL’s 1QFY25 consolidated Ebitda may fall 7 per cent sequentially to Rs 39,400 crore, as sustained growth across consumer facing businesses of Jio and Retail will be offset by a sharp decline for O2C.

"We expect RIL to continue to deliver healthy growth across its consumer-facing businesses. We estimate Jio’s Ebitda of Rs 14,200 crore to grow 4 per cent QoQ in 1QFY25, underpinned by strong EoP subscriber additions of 95 lakh and a modest increase in ARPU to Rs 182.70 per month (Rs 181.7 per month in the previous quarter). We estimate RR’s core retail revenue of Rs 52,100 crore, to grow 15 per cent YoY (4 per cent QoQ), and Ebitda of Rs 5,700 crore, up rise 17 per cent YoY, with margins of 7.2 per cent.