RIL Q1 Results: Revenue, Net Profit Decline In Line With Estimates; Jio ARPU At Rs 181.7

Reliance Industries Ltd. will report its earnings for the first quarter of financial year 2025 on Friday. The earnings will most likely be reported post trading hours for all of its three divisions: oil and gas, retail business and telecom.

Net profit of Mukesh Ambani's oil-to-telecom conglomerate is likely to fall 6.84% sequentially, according to the consensus of analysts' estimates tracked by Bloomberg, while revenue will drop 1.86%.

The company's net profit and revenue for the quarter-ended June will likely be affected by lower refining and marketing margins, despite better performance from its telecom segment.

• Revenue to drop 1.86% to Rs 2.32 lakh crore.

• Operating profit to fall 15.43% to Rs 39,789.7 crore.

• Operating margin likely to contract by 280 bps to 17.1%.

• Net profit likely to decline 6.83% to Rs 17,654.9 crore.

Although the first quarter Ebitda is expected to decline sequentially, mainly driven by the pullback in refining margins, Goldman Sachs expects market focus to move towards Reliance Industries Ltd.'s second quarter performance, where it expects the recovery in refining margin, telecom tariff hike (effective July 3), and strong same-store sales in retail to drive sequential Ebitda growth.

In terms of catalysts, since the telecom tariff hike is now done, the market focus will shift towards the upcoming AGM (typically in July or August), Goldman said, which may coincide with the potential start-up of the new energy giga complex, where it expects more details on RIL’s new energy business outlook and progress.

The oil-to-chemicals of the conglomerate is likely to see a sharp decline in earnings on the back of lower gross refining margin, said ICICI Securities in a report.

Earnings is likely to fall 23% sequentially, with an estimated $4.7 per barrel sequential decline in gross refining margin, the report said. However, that's expected to be offset by higher throughout and better petrochemical spreads.

Reliance Jio Infocomm Ltd. is likely to perform better, aided by higher subscriber addition projected at 8 million, and a 0.6% rise in average revenue per user to Rs 182.7, according to ICICI Securities.

Operating profit is expected to rise 2% over a quarter ago.

A slowdown in the retail business will pull down Reliance Retail Ltd.'s profit by 1% quarter-on-quarter, brokerages said. Still, operating profit is expected to rise 3% to Rs 6,000 crore.

Ahead of the results, the shares of Reliance Industries fell as much as 1.93% to Rs 3,112.1 apiece on the NSE. It was trading 1.64% lower at Rs 3,121.1 per share, compared to a 0.93% decline in the benchmark Nifty 50 as of 2:28 p.m.

It has risen 20.3% in the last 12 months and 20.5% on a year-to-date basis. The relative strength index was at 54.

Twenty-eight out of the 35 analysts tracking the company have a 'buy' rating on the stock, five recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 4.3%.

The counters of Mukesh Ambani-led Reliance Industries and the state-owned Oil and Gas Corp. were the top stocks dragging the Nifty Oil and Gas index.

The benchmark — NSE Nifty Oil and Gas — was trading 2.29%, or 338 points lower at 12,755.4 as of 2:39 p.m. Shares of Reliance and ONGC was down by 3.96% and 1.81%, respectively.

Twenty-eight out of the 35 analysts tracking the company have a 'buy' rating on the stock, five recommend a 'hold' and two suggest a 'sell', according to Bloomberg data.

The average of 12-month analyst price targets implies a potential upside of 4.3%.

India's primary market could witness yet another mega issue as Mukesh Ambani's Reliance Jio Infocomm Ltd. could potentially be listed in calendar year 2025, according to Jefferies.

The telecom company is focusing on monetisation and subscriber market share gains, by leading the way in the recent tariff hikes while keeping feature phone tariffs unchanged, the brokerage said in a July 10 note.

"These moves create a case for a possible public listing in CY25," said Bhaskar Chakraborty, equity analyst, Jefferies, in the note. Reliance Jio could look to IPO or spin-off Jio, as it did with Jio Financial Services Ltd., it said.

To know more, read here.

Reliance Industries net profit and revenue for the fourth quarter of fiscal 2024 rose. Net profit for the conglomerate rose 8.2% sequentially to Rs 21,243 crore for the January-March period, as compared with a Bloomberg estimate of Rs 19,726.9 crore.

The numbers were backed by strong performance in the oil-to-chemicals and consumer segments that saw double-digit growth during the quarter.

Oil And Gas

Segment revenue in the fourth quarter rose 42% YoY on account of higher volume partly offset by lower price realisation from the KG D6 field.

Jio Platforms

The segment's operating revenue grew 13.4% YoY to Rs 28,871 crore on account of robust subscriber growth across mobility and homes, and the benefit of mix improvement in average revenue per user.

Reliance Retail

Reliance Retail's revenue in Q4 FY24 rose 10.6% YoY to Rs 76,627 crore, led by growth in consumer electronics and fashion and lifestyle division performance.

Ahead of the results for Nifty 50's largest constituents, Reliance Industries Ltd. and HDFC Banks Ltd. are hinting towards diametrical moves.

First-quarter results for the two constituents commanding a combined weight of over 20% in the index are set to be announced, with Reliance's on July 19 and HDFC Bank's on July 20.

With the second largest weight in the index, Reliance Industries Ltd. is facing the biggest three-day decline in a month.

The 14-week RSI as of the week ended July 12 crossed the 72 mark—the highest in 18 weeks. The last time it crossed this level, it subsequently fell 4.1% to the 50-week exponential moving average.

The stock is down 2% so far this week, and is currently 3.4% above the 50-week EMA.

Read the whole story here.

Shares of Reliance Industries ended 1.78% lower at Rs 3,116.95 apiece on Friday, ahead of the announcement of its first quarter results.

India's benchmark stock indices ended their rally by hitting downward trends after a fresh record high for the fourth consecutive session on Friday, weighted down by Reliance Industries and Tata Steel.

The NSE Nifty 50 closed 269.95 points lower, or 1.09%, to end at a 24800.85, and the BSE Sensex lost 738.81 points, or 0.91%, to end at a fresh lifetime closing high of 80,604.65.

Meanwhile, IT major Wipro's net profit rose in the first quarter of fiscal 2025, even as its revenue fell slightly during the period. Net profit of the company rose 6% quarter-on-quarter to Rs 3,037 crore in the quarter ended June 30. That compares with the Rs 2,931.21-crore consensus estimate of analysts tracked by Bloomberg.

Read the story here.

Reliance Industries investors' wealth declined by Rs 38,161.18 crore ahead of results announcement.

The oil-to-chemicals business is likely to see a sharp decline in earnings on the back of lower gross refining margin, said ICICI Securities in a report.

Earnings is likely to fall 23% sequentially, with an estimated $4.7 per barrel sequential decline in gross refining margin, the report said. However, that's expected to be offset by higher throughput and better petrochemical spreads.

Read full story here.

Reliance Jio reported a 2% sequential rise in net profit at Rs 5,445 crore in first quarter.

Reliance Jio reported a 2% sequential rise in revenue at Rs 26,478 crore in first quarter.

Reliance Jio reported a 2.3% sequential rise in Ebitda at Rs 13,920 crore in first quarter.

Reliance Jio's Ebitda margin stood at 52.6% in the first quarter, compared to 52.4% in the previous quarter.

Reliance Industries Ebitda rose 1.8% to Rs 38,765 crore.

Reliance Industries Ebitda margin stood at 16.7% in the June quarter, compared to 17.9% in the previous quarter.

• Oil to Chemicals: Rs 1.57 lakh crore (16.6% YoY)

• Oil and Gas: Rs 6,179 crore (-4.6% QoQ)

• Retail: Rs 75,630 crore (7.8% YoY)

• Digital Services: Rs 35,470 crore (7.8% YoY)

• Others: Rs 12,080

The ol to chemicals segment includes refining, petrochemicals, fuel retailing, aviation fuel and bulk wholesale marketing. The oil and gas segment includes exploration, development, production of crude oil and natural gas. The retail segment includes consumer retail and range of related services. The digital Services segment includes provision of a range of digital services. Other business segments which are not separately reportable have been grouped under the others segment.

In April-June period, the retailer added 331 stores to take the total count to 18,918.

Capital expenditure for the quarter ended June 30, 2024, was Rs 28,785 crore.

The average revenue per user of Reliance Jio was Rs 181.7 in the June quarter. The company attributed this to better subscriber mix, partially offset by increasing mix of promotional 5G traffic being offered on an unlimited basis to subscribers and not charged separately.

“Consolidated EBITDA for the quarter improved from a year ago with strong contribution from Consumer and Upstream businesses offsetting weak O2C operating environment... The digital services business registered an impressive financial performance year-on-year, continuing its positive growth momentum.... Retail business delivered robust financial results, as compared to last year, well supported by all consumption baskets."

• Jio Platforms’ EBIDTA for quarter ended June 2024 increased by 11.6% Y-o-Y to Rs 14,638 crore.

• Jio’s net profit for the quarter grew 11.7% Y-o-Y to Rs 5,698 crore.

• Jio continued to lead the industry and gain subscriber share with 80 lakh net additions in the June quarter to 48.97 crore. JioAirFiber drove the highest ever quarterly home connects for Jio with over 11 lakh net additions.

• Jio’s ARPU was Rs 181.7 with better subscriber mix, partially offset by increasing mix of promotional 5G traffic being offered on an unlimited basis to subscribers and not charged separately.

• Jio’s customer engagement levels continued to remain strong with total data traffic increasing by 32.8% to 44.1 billion GB, and voice traffic increasing 6% Y-o-Y to 1.42 trillion minutes.

• Jio is the largest 5G operator outside China with around 13 crore 5G subscribers accounting for over 31% of Jio’s wireless data traffic. The entire 5G data is being carried on Jio’s own 5G+4G combo core.

• Business delivered steady performance during the quarter with revenue of Rs 75,615 crore, up 8.1% Y-o-Y.

• Reported EBITDA at Rs 5,664 crore which was up by 10.5% Y-o-Y, led by increase in footfalls and expansion of store footprint, streamlining of operations driving margin improvement.

• EBITDA before Investment Income was at Rs 5,448 crore, a growth of 11.5% Y-o-Y.

• Depreciation increased on account of higher asset base due to addition of new stores.

• Finance cost declined on account of repayment of borrowings.

Anshuman Thakur, non-executive director said the following:

• 5G accounts for 31% of total data traffic.

• Fixed wireless business crossed 1 million subscribers.

• Air Fibre demand coming from not just tier 1 but tier 2 and 3 cities as well.

• Tariff hikes may have some transient impact but will strengthen the overall sector in the long run.

"The deep integration and flexibility built into our O2C business model helped mitigate the impact of challenging operating environment. The business was impacted by lower fuel cracks with tepid global demand and ramp-up of new refineries. The oil and gas segment continued its growth trajectory with higher production, offsetting lower year-on-year gas price realizations."