Reliance Q3 FY25 Results Preview: Reliance Industries, the country’s largest company by market cap, can release its December quarter results on January 16. According to analysts, overall results may remain mixed due to strong growth in telecom earnings, improvement in refining margins, and sluggish retail growth. The company’s revenue may increase on a quarterly basis but net profit may increase at a higher pace. Additionally, despite weakness in petrochemicals, consolidated EBITDA may benefit from stronger refining margins and higher ARPU.
In a poll conducted by Moneycontrol among brokerages, it has been estimated that Reliance’s net profit may increase by 6 percent on quarterly basis to ₹ 17,482 crore in October-December 2024 and EBITDA may also jump by more than 5 percent to ₹ 41,125 crore. Brokerages also estimate that the EBITDA margin in the third quarter could be between 18.2-18.9 percent. The most bullish trend is from Elara Capital which has estimated a 10 percent growth in net profit and 6 percent growth in EBITDA on a quarterly basis.
Which factors can support earnings?
O2C Business: According to brokerage firm Emkay Research, O2C (Oil-to-Chemical) earnings may show improvement on a quarterly basis due to revival in diesel crack and decline in crude premium. Analysts estimate GRM to be $8.7-$10.8 per barrel due to better ex-China supply-demand dynamics and favorable cost base. However, according to Goldman Sachs, petrochemical margins may remain under pressure due to issues related to supply and demand of olefins and some aromatics.
Digital Services: Reliance Jio’s results may remain strong. Due to higher ARPU (average revenue per user) and tariff hike due to Elara Capital, its EBITDA is expected to grow by 17 per cent YoY and 4 per cent QoQ. Its ARPU can reach ₹203-₹205. Growth in the number of subscribers may remain sluggish.
Retail Business: EBITDA growth in the retail segment may be 5-6 percent on a quarterly basis. However, analysts see challenges in B2B business.
These things will be kept in mind in the quarterly results
O2C Refining Margin: The sustainability of gross refining margins (GRM) and the outlook for petrochemical recovery will remain under watch.
Digital Services Growth: Analysts will keep an eye on ARPU (average revenue per user), subscriber base dynamics and Jio’s broadband growth trajectory.
Retail Segment Outlook: Recovery of consumption in cities and planning to increase store network will also be important.
Capex and Debt Trends: Investors will keep an eye on capital expenditure and net reduction in debt. Apart from this, updates on the timeline of Jio’s listing will also be kept an eye on.
Disclaimer: Moneycontrol is a part of Network18 Group. Network18 is controlled by Independent Media Trust, whose sole beneficiary is Reliance Industries.
Disclaimer: The advice or opinions expressed on Moneycontrol.com are the personal views of the expert/brokerage firm. The website or management is not responsible for this. Moneycontrol advises users to always seek the advice of a certified expert before taking any investment decision.