Mukesh Ambani-owned Reliance Industries is scheduled to declare its September quarter results for financial year 2016-17 after market hours on Thursday.
The company is expected to snap its six-quarter long rising trend on the growth front by reporting a 4.4 per cent sequential drop in standalone net profit in Q2.
"We expect RIL to report sequential decline in profitability led by weaker refining margins, partially offset by an improvement in petchem margins and higher refining and petchem volumes," said ICICI Securities in a research note.
Gross Refining Margins
Brokerage Prabhudas Liladhar estimated RIL earnings to come off their Q1FY17 levels to Rs 70.3 billion led by lower refining margins; factored in $9.5/bbl ($11.5/bbl in Q1 as it included $2/bbl of inventory gains).
Meanwhile, refining throughput is likely to recover from Q1 lows when RIL had taken maintenance shutdown. "We have factored in 18.1MTPA (Q1FY17 16.8MTPA). Also, petrochemicals spreads are better sequentially," the brokerage said.
Earnings downgrade expected
Earnings downgrade is likely in RIL due to lower GRM, believes brokerage Kotak Institutional Equities. "Even if recent recovery in GRM sustains GRM and earnings downgrade appears eminent," it added.
Commentary on Reliance Jio
Ambani launched its telecom venture Reliance Jio in September to take on incumbent players such as Bharti Airtel, Idea and Vodafone. The ridiculously cheaper call and data plans offered have made RIL investors wary that company's profits might be siphoned off to get RJio going.