Reliance Industries Q1 Preview: Jio Seen To Cushion Impact Of Pressure On Petrochemical, Refining

Reliance Industries Ltd. is set to report its June quarter earnings on Thursday, July 18, and analysts expect an expansion in operating margin despite a dip in revenue and a muted growth in net profit.

The company's main petrochemicals and refining business is expected to be under pressure. Telecom is likely to report its highest sequential growth, helping billionaire Mukesh Ambani's conglomerate sail through the first quarter. The retail segment may slide on a sequential basis and remain steady on a yearly basis.

• Revenue seen down 7.5% at Rs 2,41,800 crore versus Rs 2,61,388 crore

• Ebitda seen up 1.5% at Rs 44,497 crore versus Rs 43,832 crore

• Ebitda margin seen at 18.4% versus 16.8%

• Net profit seen up 2% at Rs 19,775 crore versus Rs 19,407 crore

• Oil-to-chemical Ebitda seen to rise 2% to Rs 15,414 crore from Rs 15,080 crore.

• Oil & Gas (gas exploration) Ebitda expected to fall 4% to Rs 4,905 crore compared to Rs 5,123 crore.

Singapore's Gross Refining Margin (GRM), a key indicator of refining profitability, averaged 77% higher around $5.5 per barrel compared to $3.1 in the March quarter.

RIL's O2C growth will be marred by planned refinery maintenance shutdown and weaker petchem margins. Oil and gas exploration Ebitda will fall owing to lower realisation and volumes.

Revenue for Reliance Retail Ventures Ltd. is projected to drop by 4% to Rs 85,111 crore compared to Rs 88,637 crore in the previous quarter. Ebitda could decline 1% to Rs 6,652 crore.

The segment may see a quarter-on-quarter decline due to a high base effect, but demonstrate stable year-on-year growth driven by continued store additions and increased footfall.

• Revenue seen rising 2.8% to Rs 30,863 crore versus Rs 30,018 crore

• Ebitda seen rising 3.8% to Rs 16,458 crore versus Rs 15,852 crore

• Ebitda margin seen at 53.3% versus 52.8%

• Net profit seen rising 0.7% to Rs 6,687 crore versus Rs 6,642 crore

• ARPU seen rising 1.1% at Rs 208.4 versus Rs 206.2

• Subscribers seen at 49.75 crore versus 48.82 crore

Analysts expect growth in Reliance Jio to be supported by tariff hikes taken earlier and subscriber additions. Average revenue per user or ARPU will grow for the fourth consecutive quarter, but the trajectory is seen to be slowing.

Overall subscriber growth will be aided by strong user additions in the broadband space.

Markets will be parsing through the RIL management's commentary on margin outlook in refinery and petrochemical business given global trade uncertainty due to US tariff policies.

The US has also increased pressure on countries buying sanctioned Iranian and Russian oil — key suppliers in the energy market.

Besides fossil fuels, Reliance has been pushing into new energy businesses like solar, fuel cells, green hydrogen, batteries, and other related technologies. The outlook and expansion plans will be in focus.

Commentary on ARPU following the tariff hikes and growth in Jio Fiber will also attract interest.