Reliance Q2 preview: The September quarter performance of Mukesh Ambani-led Reliance Industries (RIL) is expected to be robust, driven primarily by the O2C recovery, with Jio providing steady support. However, Reliance Retail's margins are seen to be under pressure.
India's most valuable firm, whose telecom arm - Jio Platform - listed on the bourses earlier this week, is slated to post its second quarter results for the ongoing fiscal year (Q2 FY27) on October 30. Along with earnings announcement, the company's board will also consider raising of funds by way via debentures.
RIL, in line with past quarters, is expected to post its earnings performance post the market trading hours. RIL Q2 previewOverall, brokerages expect double-digit growth on a yearly basis in topline of the company in the range of 22-30 per cent to ₹3.53 trillion-₹3.09 trillion.
The increase in earnings before interest, tax, depreciation and amortisation (Ebitda) is seen at 11-15 per cent year-on-year (YoY). Meanwhile, profit could see a rise of 15-30 per cent YoY, as per brokerages. According to Kotak Institutional Equities (KIE) estimates, the profit is seen rising 30 per cent YoY and 12.8 per cent quarter-on-quarter (QoQ) to ₹23,621.7 crore during the period under review, driven by net sales growth of 38.8 per cent YoY and 14.2 per cent QoQ to ₹3.53 trillion.
Elara Capital said that RIL's consolidated Ebitda to grow 11 per cent YoY to ₹50,809 crore, while it pegs sales growth at 27.9 per cent to ₹2.5 trillion and profit increase at 16.7 per cent YoY to ₹21,189 crore. Standalone Ebitda, however, is expected to stay flat QoQ at ~₹19,540 crore, said PL Capital, driven by higher crack spreads, but partly offset by elevated crude costs.
O2C segment expectationsJP Morgan said that Reliance’s O2C segment is expected to deliver a 24 per cent quarter-on-quarter (QoQ) Ebitda growth on continued strength in cracks, higher volumes and lower fuel retail losses. Meanwhile, KIE pegs segment Ebitda growth at 47 per cent YoY for O2C.
"O2C will likely benefits from strong SEZ refinery earnings (no windfall tax impact), US ethane-based petchem and weak Indian rupee." Elara analysts added that Q2FY27E gross refining margin may be at $25/bbl versus an estimated $11/bbl in Q 2FY26. Reliance Jio expectationsJio Platforms' performance is expected to be driven by strong subscriber addition and increase in ARPU (average revenue per user), said analysts.
Motilal Oswal Financial Services (MOFSL) sees a 10.2 per cent YoY rise in net revenue to ₹35,100 crore, driven by subscriber net adds and home broadband momentum. It expects a 2.8 per cent QoQ Ebitda growth, with margins to remain largely stable at 54.7 per cent.
Jio's profit for the quarter is seen growing 6 per cent to ₹7,400 crore. Brokerages builds in 1 per cent QoQ growth in blended ARPU to ₹218. Reliance Retail expectationsReliance Retail is seen posting a 7 per cent YoY rise in net revenue although Ebitda would decline, adversely impacted by the scale-up of hyper-local deliveries and festive shift, said Motilal Oswal analysts.
Revenue is seen at ₹84,800 crore and Ebitda at ₹6,430 crore. The brokerage expects ~80 bps YoY operating Ebitda margin contraction, while PAT is seen falling 15 per cent to ₹3,000 crore. KIE also said it expects relatively muted retail business, with 11.7 per cent YoY revenue growth and lower Ebitda margin Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited.
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