What analysts anticipate about RIL’s Q2 show
The company's retail segment EBITDA is expected to rise as fashion, jewellery, and electronics sales rebound and margins return to pre-pandemic levels
The Mukesh Ambani-led group Reliance Industries is likely to report high growth in consolidated net profit in the September quarter, driven by a significant increase in earnings before interest, tax, depreciation, and amortisation (EBITDA). Growth in retail, digital-telecom sector and stable petrochemical margins will drive the improvements, the Business Standard has reported.
The report quoted analysts at HDFC Securities as saying that they anticipate a 13.7% quarter-on-quarter growth in RIL’s consolidated EBITDA to Rs 26,600 crore and a 40.2% year-on-year (YoY) increase.
It quoted the report as saying that India’s most valued company’s oil-to-chemicals (O2C) segment will see its EBITDA per tonne of crude processed climb by 22% sequentially, thanks to a 28% YoY improvement in gas oil cracking.
Higher oil prices could result in a healthy gain in revenue in the second quarter, both year over year and sequentially. Brent crude is trading at over $85 per barrel, up from $75 at the end of the June quarter and around $40 at the end of Q1FY21. There may also be some inventory gains, resulting in higher profits in the O2C company.
Analysts’ expectations
The report quoted Morgan Stanley as saying that they anticipate that RIL’s gross refining margin (GRM) will increase by $0.5 per barrel sequentially to $7.3 per barrel in Q2FY22, with refinery utilisation rates returning to typical levels of up to 105%.
However, some decrease in petchem deltas is noted influencing O2C’s EBITDA on a sequential basis, the report quoted analysts at Motilal Oswal Securities as saying.
The news report quoted the brokerages as saying that the company’s retail segment EBITDA is expected to rise as fashion, jewellery, and electronics sales rebound and margins return to pre-pandemic levels.
Brokerages are still divided on RIL’s telecom business’ average revenue per unit (ARPU) for the quarter.
On the one hand, YES Securities’ research indicated that the company’s retail and refinery businesses would somewhat offset the likely sequential decrease in ARPU in the company’s Jio Infocom sector.
Morgan Stanley, on the other hand, predicted a 14 million increase in telecom subscriber additions for the September quarter, in line with the previous quarter’s trend. This should be the main driver of a 5% sequential increase in telecom earnings, however, foreign brokerages expect ARPUs to improve slightly by 1.5% QoQ to Rs 140 per month. HDFC Securities anticipates a little increase in ARPU.