Reliance Industries Ltd.'s third-quarter earnings for fiscal 2025 is likely to get a boost from strong overall performance, especially the oil-to-chemicals business that saw refining margins improve during the quarter.
The adjusted net profit of India's diversified conglomerate, led by billionaire Mukesh Ambani, is seen up 13.5% quarter-on-quarter at Rs 18,793 crore compared with Rs 16,560 crore in the previous quarter, according to consensus research estimates tracked by Bloomberg.
The results will be out on Thursday, Jan. 16.
RIL Q3 Results: Bloomberg Estimates (Consolidated, QoQ)
Revenue seen up 2.6% at Rs 2.37 lakh crore from Rs 2.31 lakh crore in Q2 FY25.
Ebitda seen up 7.6% at Rs 42,035 crore from 39,058 crore in the previous quarter.
Margin seen flat at 17.7% vs 17.8% in previous quarter.
Adjusted net profit seen up 13.5% at Rs 18,793 crore from Rs 16,560 crore in previous quarter.
"RIL is expected to report a healthy 6.2% sequential growth in EBITDA, led by 12% jump in O2C business, while Jio/Retail/Upstream verticals are expected to report an EBITDA growth of 4%/7%/2% QoQ," Systematix Institutional Equities said in a research report.
"A 38% QoQ jump in gross refining margins and better petrochemical spread would lead to higher O2C profits," it said, adding, "the festive and wedding season is also expected to help the retail business to grow at a decent pace during the quarter".
Goldman Sachs expects the energy Ebitda to remain flat sequentially as gains in refining earnings were offset by weaker petrochemical earnings. "On refining, we expect a sequential growth in net GRM to $8.7 per barrel in 3Q (+6% QoQ) driven by better ex-China supply-demand dynamics and a more favourable cost base. Specifically, US and India diesel demand was stronger," it said.
Brokerage CLSA anticipates a 13% quarter-on-quarter rise in RIL's O2C Ebitda on the back of improvement in refining. However, "upstream Ebitda is expected to be 1% lower QoQ due to marginal decline in production", it said.
The Singapore benchmark gross refining margin improved from $3.6 per barrel in Q2FY25 to $5 per barrel in Q3 FY25, as transportation fuel spreads expanded. However, regional and domestic petrochemical spreads continue to drag with realisations remaining subdued, UBS Securities said in a report. "We estimate 10% QoQ improvement in O2C EBITDA to Rs 13,600 crore."
Dolat Capital Markets in a research report, said, sequential recovery in GRMs on account of improvement in diesel and Jet cracks, and processing of discounted crude from Russia, Iraq and Venezuelan have helped the company improve its O2C earnings.
With respect to other verticals — upstream (E&P), retail, and telecom — the brokerage noted that upward revision of 3% QoQ in KG gas price with 1mmscmd gas-production improvement, strong retail segment Ebitda from festival-season sales in the third quarter, and around 5% growth in Jio's average revenue per user to Rs 205, despite continued net-subscriber loss of around 3 million, are the major growth drivers for the company.
CLSA expects the improving flow-through of tariff hikes to drive Jio's ARPU by 6% QoQ to Rs 206, while subscribers may decline by 0.7 million. "Retail may report another quarter of slow (muted) growth, with a 2% YoY/8% QoQ rise in its Ebitda."
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