Reliance Q1 results preview: Consolidated EBITDA may decline sequentially; Retail, Jio may stay strong

Reliance Q1 results preview: Reliance Industries (RIL) is expected to report a sequential decline in EBITDA and profit for the April-June quarter, primarily due to challenges in its oil-to-chemicals (O2C) segment. However, experts anticipate that the company's retail and telecom divisions will maintain strong performance.

The oil-to-telecom-to-retail conglomerate will report its Q1FY25 financial results on Friday, July 19.

Brokerage firms expect the company to report a mixed set of numbers, which may see a year-on-year (YoY) rise in revenue and profit, but there could be a quarter-on-quarter (QoQ) decline in operating profit and margin.

In the previous quarter (Q4FY24), Reliance reported a decent double-digit growth in consolidated revenue, but its profit numbers saw a mild dip.

What experts expect

Abhishek Jain, the head of research at Arihant Capital, expects strong performance in RIL's B2C retail segment, particularly from Jio, where earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to reach approximately ₹14,250 crore, marking a 4.4 per cent improvement QoQ. The core retail revenue is projected to grow by 11-12 per cent to around ₹50,100 crore, with a 3 per cent QoQ increase in EBITDA.

"We are looking at a consolidated EBITDA of about ₹39,900 crore. RIL's investments in new ventures, especially renewable energy, will be crucial to watch. These investments signal the company's strategic shift towards sustainable growth. Moreover, the anticipated demerger could be a positive move for investors, potentially unlocking further value," said Jain.

Brokerage firm Nuvama Institutional Equities expects Reliance Industries' revenue to rise 10 per cent year-on-year (YoY) but profit to remain flat.

"We anticipate a modest nearly 4 per cent YoY rise but a 7 per cent QoQ fall in RIL EBITDA because of relatively strong performance across oil and gas, retail and Jio but weak oil-to-chemicals. We expect oil-to-chemicals EBITDA to fall 11 per cent YoY and 19 per cent QoQ on weak refining and petrochemicals," said Nuvama.

Nuvama expects RIL oil and gas segment's EBITDA to rise nearly 30 per cent YoY but fall 8 per cent QoQ on increased production from the KG-D6 block offset by a 20 per cent YoY dip in deep-water gas prices.

"Retail EBITDA may remain strong (up 20 per cent YoY and 3 per cent QoQ) on higher footfalls. Jio's EBITDA is likely to rise 11 per cent YoY and 3 per cent QoQ on a high subscriber base (up 8 per cent YoY and 1 per cent QoQ). ARPU will likely rise by 2 per cent YoY and 1 per cent QoQ," said Nuvama.

On the other hand, Kotak Institutional Equities expects RIL’s consolidated EBITDA to decline by nearly 8 per cent QoQ due to weak O2C performance and muted growth in digital services and organised retail. The brokerage firm expects RIL’s standalone EBITDA to decline nearly 15 per cent QoQ on sequentially weaker refining margins, partly offset by a modest improvement in petrochemical spreads.

In E&P (exploration and production), Kotak expects a nearly 4 per cent QoQ decline in EBIT on marginally lower realisation and production.

For Jio, Kotak expects EBITDA to increase by nearly 2 per cent QoQ due to nearly 9.4 million overall net subscriber adds and blended ARPU flat at ₹182. The retail segment's EBITDA may increase by a modest 2 per cent QoQ, driven largely by increased store footprint and operating leverage, Kotak said.

Brokerage firm Motilal Oswal Financial Services expects RIL's consolidated EBITDA to remain flat YoY at ₹410 billion, while standalone EBITDA may rise 3 per cent YoY to ₹179 billion.

Overall revenue can rise 12.6 per cent YoY to ₹2,337 billion and adjusted PAT may climb 4 per cent YoY, said the brokerage firm.

"Further clarity on ₹750 billion announcements in the new energy business, growth in retail store additions, and any pricing action in telecom are the key monitorable," said Motilal Oswal.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.