RIL Q4 Preview: Street eyes strong revenue, EBITDA growth despite likely fall in profit

Revenue from operations for the fourth quarter are expected to grow up to 12% year-on-year, according to an average estimate of four brokerages.

Consolidated EBITDA for the quarter is seen increasing 3% sequentially and 9% year-on-year to Rs 41,900 crore. Net profit for the quarter, meanwhile, is likely to drop up to 7% year-on-year, while rising 2% on a quarter-on-quarter basis.

The diversified conglomerate is likely to see a strong growth in its retail and telecom business. Retail EBITDA is likely to remain strong and show a growth of 28% year-on-year on higher footfalls. JIO's EBITDA is likely to surge 13% year-on-year.

In the preceding December quarter, RIL reported a 9 growth in consolidated net profit at Rs 17,265 crore, while revenue from operations jumped nearly 4% to Rs 2.28 lakh crore

Here's what analysts expect from RIL's Q4:

ICICI Securities

RIL is likely to see strong quarter for its oil-to-chemicals business with an estimated $1/bbl QoQ improvement in GRMs (gross refined margins. While Reliance Jio may see 2% rise in EBITDA quarter-on-quarter, the retail EBITDA is likely to grow just over 1% quarter-on-quarter. Consolidated EBITDA for the reporting quarter may rise 5% quarter-on-quarter.

Nuvama

EBITDA for the quarter is likely to grow 8% year-on-year mainly due to robust show across all verticals partially offset by weak O2C. We expect O2C EBITDA to fall 8% year-on-year on weak refining and petchem.

Nomura
We estimate O2C EBITDA to be around Rs 15600 crore, an increase of 11% quarter-on-quarter, underpinned by a strong increase in refining margins, while petchem remains broadly steady. We factor in upstream EBITDA of Rs 5600 crore, a decline of 4% quarter-on-quarter, as modestly higher volumes would be offset by sequentially higher opex.

We expect RIL to continue to deliver healthy growth across its consumer-facing businesses. Jio’s EBITDA is likely to be around Rs 13,600 crore, underpinned by strong EoP subscriber additions of 10.5 million, albeit ARPUs will remain steady quarter-on-quarter.

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