Reliance Q4 Results Preview: Revenue, EBITDA to rise 10% YoY on retail, telecom growth; O2C biz likely stronger

According a majority of brokerage firms and D-Street analysts, Reliance Industries’ net debt concerns are overdone. The conglomerate has industry leading capabilities across businesses to drive robust 14-15 per cent earnings per share (EPS) CAGR or compound annual growth rate over the next 3-5 years.

Also Read: Mukesh Ambani-led Reliance Industries to announce Q4 results, consider dividend on April 22

Reliance Q4 Results Preview: Let’s take a look at the Q4FY24 estimates by leading brokerages of Reliance Industries-

Elara Capital: Reliance may see an 11 per cent YoY growth in consolidated EBITDA, led by four per cent standalone EBITDA growth refining/petchem/E&P, 42 per cent growth in retail EBITDA and 11 per cent growth in digital services’ (telecom) EBITDA. The brokerage expects revenue to come in at ₹2,32,627.3 crore, EBITDA at ₹42,523.4 crore, and net profit at ₹20,780 crore in Q4.

Equirus Capital: Profitability to improve sequentially on better O2C earnings. Jio and Retail should continue to deliver robust performance, while E&P should witness steady realization. Key things to look for are margin outlook in refinery and petchem. The brokerage expects net profit to rise 14 per cent and EBITDA up 9.9 per cent YoY.

ICICI Securities: Reliance is likely to see a sharp jump in its OTC segment earnings QoQ with an estimated $1/bbl QoQ improvement in GRMs, better petchem spreads and higher refining throughput (Q3 had a shutdown at some refinery units). RJio may deliver nearly two per cent QoQ rise in EBITDA, with RIL’s retail EBITDA growing 1.4 per cent QoQ. Overall, consolidated EBITDA may jump five per cent QoQ and net profit can rise around six per cent QoQ in Q4FY24E.

JM Financials: Reliance’s 4QFY24 EBITDA is likely to rise 3.6 per cent QoQ to ₹421 billion due to 11.8 per cent QoQ growth in O2C EBITDA driven by higher GRMs; while digital EBITDA is expected to be higher by 2.6 per cent QoQ, Retail EBITDA is expected to be flattish QoQ and E&P EBITDA is expected to be down 6.8 per cent QoQ. 

Assumptions: a) O2C EBITDA to rise 11.8 per cent QoQ to ₹15,700 crore due to improvement in GRM to ~$11.2/bbl driven by improved diesel and petrol cracks; it was also aided by higher refining throughput though petchem margin is expected to remain subdued; 

b) E&P EBITDA to decline 6.8 per cent QoQ to ₹5,400 crore due to rise in profit sharing with government as per PSC while gas output and price ($9.96/mmbtu for 2HFY24) are expected to be largely flattish QoQ; 

c) Digital EBITDA is expected to grow by 2.6 per cent QoQ to ₹14,600 crore on account of robust net subs additions of ~10.5mn QoQ, aided by slight improvement in ARPU to ₹182.5 (from ₹181.7 in 3QFY24) and 

d) Retail EBITDA is likely to grow by only 0.4 per cent QoQ to ₹6,300 crore on a high base of 3QFY24 (on account of strong festive sales in 3QFY24)

Nuvama Institutional Equities: RIL: EBIDTA up 8%; Gas up 41%, Retail 28%, but O2C down 8% YoY

We anticipate ~eight per cent YoY surge in EBITDA (+2% QoQ) on account of strong performance across all verticals partially offset by weak O2C. We expect O2C EBITDA to fall eight per cent YoY (six per cent QoQ) on weak refining and petchem. Benchmark Singapore GRMs have fallen 10 per cent YoY (+ 37 per cent QoQ) on weak global product cracks. 

We expect RIL ONG’s EBITDA to rise ~41% YoY (-8 per cent QoQ) on increased production from KG-D6 block offset by 20 per cent YoY dip in deepwater gas prices (flat QoQ). Retail EBITDA is likley to remain strong (up 28% YoY and 1% QoQ) on higher footfalls. JIO’s EBITDA is likely to surge 13% YoYand 4% QoQ on high subscriber base (up 9% YoY/2% QoQ). ARPU shall likely rise by 3% YoY/ 2% QoQ.

Also Read: Reliance: 3 key reasons why Morgan Stanley is overweight on conglomerate

Motilal Oswal Financial Services: Expect consolidated EBITDA to remain flat YoY at ₹38,800 crore. Expect standalone EBITDA at ₹18,260 crore (up one per cent YoY). Expect production meant for sale at 17.1mmt (flat YoY). Expect EBITDA/mt at $91 (-10 per cent YoY). Further clarity on ₹75,000 crore announcements in the new energy business, growth in Retail store additions, and any pricing action in telecom are the key monitorable.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 20 Apr 2024, 06:20 PM IST