Reliance Industries Limited Q1 Expectations

Reliance Industries Limited (RIL) is set to announce its Q1FY25 results, and market analysts predict a mixed performance. Despite expected annual revenue growth, sequential declines in operating profit and margins are anticipated due to lower refining margins and a slowdown in the retail business.

Analyst Predictions on Segment Performance

• Oil-to-Chemicals (O2C): The O2C segment is forecasted to see a decline in earnings due to a sequential drop in gross refining margins (GRMs), even though there is improved capacity utilization and better petrochemical pricing.
• Oil and Gas: EBITDA in the oil and gas segment is expected to increase by nearly 30% y-o-y but decrease 8% q-o-q, driven by higher production from the KG-D6 block but tempered by a 20% y-o-y dip in deep-water gas prices.
• Jio: Jio is projected to maintain steady performance with an 11% y-o-y and 3% q-o-q  rise in EBITDA, supported by a growing subscriber base and increasing Average Revenue Per User (ARPU).
• Retail: The retail segment’s EBITDA is anticipated to grow by 20% y-o-y and 3% q-o-q, benefiting from higher footfalls and an expanding store footprint.

Annual Performance in FY24

RIL achieved record annual consolidated revenue of Rs.10 lakh crore ($119.9 billion) in FY24, marking a 2.6% y-o-y increase. The annual consolidated EBITDA reached Rs.1.78 lakh crore ($21.4 billion), up by 16.1% y-o-y. Annual consolidated profit before tax (PBT) surpassed Rs.1 lakh crore, amounting to Rs.1,04,727 crore ($12.6 billion), an 11.4% rise y-o-y.

Jio Platforms and Reliance Retail both reported notable annual net profits, crossing Rs.20,000 crore and Rs.10,000 crore respectively. The quarterly consolidated EBITDA for Q4FY24 stood at Rs.47,150 crore ($5.7 billion), up 14.3% y-o-y. A dividend of Rs.10 per share has been announced.

Conclusion: In Conclusion, RIL’s first-quarter performance for FY25 is expected to show annual revenue growth, but challenges in the O2C segment and lower refining margins may lead to a sequential earnings contraction. Despite these challenges, steady performances from Jio and the retail segment provide a balanced outlook for investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.