Reliance Industries Q1 Results Preview: Jio ARPU seen stable; O2C may see weakness
Reliance Industries Ltd., the Nifty 50 heavyweight, will be reporting its June quarter results on Friday, July 19. The stock has risen 7% in the last one month ahead of the earnings announcement.
CNBC-TV18 poll expects the company’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to increase marginally from the same period last year. Revenue may also see a slight growth compared to last year.
On the other, the company’s EBITDA margin may decline from the same quarter last year, as per the CNBC-TV18 poll.
Consolidated Results
Reliance Industries’ consolidated EBITDA is likely to see marginal growth on a year-on-year basis. However, when compared to the March quarter, growth is likely to be weaker on lower Gross Refining Margins and muted growth in Jio and Retail.
Reliance Jio
Jio is likely to report a steady quarter with revenue growth of 2.9% driven by subscriber growth of nearly 1.8% and a slight growth in its Average Revenue Per User (ARPU), which is seen at ₹182 from ₹181.7 in the previous quarter.
Brokerage firm Morgan Stanley said that the June quarter is now inconsequential considering that the impact of the tariff hikes will be felt only in the September and December quarter onwards. It anticipates a 16-18% growth in ARPU over the next two quarters.
Reliance O2C & Oil and Gas
Singapore GRMs declined sharply during the quarter on weaker cracks for key products. Diesel cracks fell to $14 per barrel from $21 per barrel in the March quarter.
O2C EBITDA is likely to decline by 12% year-on-year and 20% quarter-on-quarter. Oil and Gas volumes though, are likely to go up by 43%
Reliance Retail
The key thing to track for the retail business will be the impact that the Lok Sabha Elections and the heatwaves have had on consumer sentiment. However, growth is likely to be aided by an increased footprint and store expansion.
Revenue for the quarter is likely to grow by 11.1%, while EBITDA may rise by 11.6% from last year.
Shares of Reliance Industries recently made a record high of ₹3,217 and now has a market capitalisation well above ₹21 lakh crore.
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