Reliance Industries Ltd.'s profit and revenue are expected to rise in the quarter ended September as falling demand for its key petrochemical products will be offset by rising refining margins and the performance of its telecom and retail units.
Consolidated net profit of India's biggest company by market value, which will announce its earnings on Friday, is expected to rise 2.1% sequentially to Rs 12,526.2 crore in the three months through September, according to the average of analysts' estimates tracked by Bloomberg.
The consolidated revenue may increase 3.6% over the preceding quarter to Rs 1.45 lakh crore, while operating income is estimated to fall 10.6% quarter-on-quarter.
Oil-To-Chemicals
The segment's operating profit is projected to fall amid moderating petrochemical prices and spreads.
Prices of key polymers like polyethylene, polypropylene and polyvinyl chloride have contracted between 6% and 9% sequentially in the second quarter, Kotak Securities said in a report. That compares with 10-19% growth in the first quarter.
Key polymer-naphtha spreads have contracted 25-30% quarter-on-quarter compared with a 6-23% rise in the preceding quarter, the report said.
On the other hand, refining margins will improve owing to higher inventory gains and recovery in gasoline and jet fuel spreads. The benchmark Singapore gross refining margin rose 76% sequentially to $3.7 a barrel in the second quarter.
Brent crude prices rose 5.9% during the period to $73.2 a barrel, while petrol, diesel and jet fuel spreads increased 20%, 2%, and 16% quarter-on-quarter, respectively.
Reliance Jio
The telecom arm is expected to add 1.5 crore subscribers in the second quarter. Its earnings will improve amid stabilising business conditions.
Revenue and operating profit are expected to rise 4.4% and 3.5% quarter-on-quarter, respectively. However, the average revenue per user is expected to fall 1% amid strong offtake in the low-ARPU Jio Phone.
Motilal Oswal pegs Reliance Jio's Ebitda to increase 5.4% over the preceding quarter to Rs 9,100 crore.
Reliance Retail
The retail unit's Ebitda is expected to jump owing to a strong rebound in demand across categories after Covid-19-related restrictions were eased in the quarter ended June. Kotak Securities estimates retail Ebitda to double sequentially to Rs 2,830 crore.
(Estimates compiled from research reports of Motilal Oswal, Kotak Securities, Emkay and ICICI Securities)
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