Reliance Industries Ltd.'s profit and revenue are expected to decline as demand for petchem fuel remained under pressure and refining margin continued to fall in the quarter ended September.
Consolidated net profit of India's biggest company by market capitalisation is expected to fall 27.2% year-on-year to Rs 8,194 crore in the July-September period, according to the average of analyst estimates tracked by Bloomberg. Consolidated revenue is likely to fall by a fourth to Rs 1,11,468 crore, while operating income is estimated to slip 13.7%.
But the performance of its telecom unit and a rebound in the retail segment are expected to aid the parent's financials sequentially.
Reliance Industries is set to announce its second-quarter results on Friday.
Global fuel demand fell sharply after countries imposed lockdowns to curb the Covid-19 pandemic. Lower demand for refined products led to a decline in output by refineries. In India, too, demand for petrol and diesel fell in April and most of May, hurting refining margin. While domestic demand improved as the nation gradually lifted the shutdown, margin remained under pressure.
The Singapore gross refining margin—the Asian benchmark for what a refiner earns on processing every barrel of crude—settled at near-zero per barrel during the quarter ended September compared with minus $0.9 in the preceding three months.
Brent crude price, too, ended flat in the second quarter after rising 36% sequentially to $42.7 a barrel.
Refining utilisation is expected to decline as it shut crude refining units for maintenance, leading to lower throughput (15 million tonnes). An improvement in gasoline and naphtha cracks is likely to be offset by a decline in diesel-LPG cracks, supplemented by a rise in crude selling price during the quarter.
While petrochemical volume may improve sequentially for most chemical products as demand rose after India eased lockdown curbs, a complete recovery may take time.
Reliance Jio
Reliance Jio Infocomm Ltd. added 12 million subscribers in the quarter ended September, taking its total user base to 410 million. The telecom unit's revenue is expected to rise sequentially, driven by user addition and delayed translation of tariff hikes. The company's ARPU for the second quarter is seen at Rs 143.8.
Reliance Retail
The core retail revenue may jump quarter-on-quarter, driven by JioMart as people still buy grocery online despite easing lockdown curbs. Fashion and electronics, however, will continue to decline.
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