Reliance Industries Ltd (RIL), India’s most-valued company by market capitalisation, saw its shares slip nearly 1% in Friday’s trading session ahead of its March quarter (Q4 FY25) results. The stock touched an intraday low of ₹1,288 before recovering slightly to ₹1,292.05 on the BSE, marking a 0.74% decline as of 12:15 PM.
Expectations of Decline in Profit and Revenue
Market analysts anticipate a weak quarterly performance from the oil-to-telecom conglomerate, with net profit expected to fall 8–10% and revenue likely down 5–6% year-on-year (YoY). Nuvama Institutional Equities projects RIL’s profit after tax at ₹17,435.60 crore, compared to ₹18,951 crore in the same quarter last year—a decline of around 8%. Revenues are estimated to dip 4.8% YoY to ₹2,25,242 crore from ₹2,36,533 crore.
Mixed Ebitda Outlook Across Business Segments
Despite the expected dip in net profit and revenue, Nuvama sees RIL’s consolidated Ebitda rising 2% YoY, though down 2% quarter-on-quarter (QoQ). This mixed outlook is driven by expected weaknesses in Oil-to-Chemicals (O2C) and Oil & Gas (O&G) segments, balanced by robust growth in Digital Services and Retail.
Specifically, Nuvama predicts a 14% YoY drop in O2C Ebitda due to weaker product cracks and petrochemical spreads, and a 9% YoY decline in O&G Ebitda, attributed to reduced production from the KG-D6 block. However, the Retail segment is expected to post an 11% YoY Ebitda growth thanks to expanded retail space, better margins, and improved realizations—though it may fall 9% QoQ due to the festive season winding down and a shorter quarter.
Jio: Bright Spot in the Portfolio
Jio Platforms Ltd is anticipated to be a standout performer. Its Ebitda is projected to rise 16% YoY, backed by a 13% increase in Average Revenue Per User (ARPU) and a 1% growth in subscriber base. Emkay Global estimates net subscriber additions of 25 lakh and an ARPU of ₹205.
Emkay and Kotak’s Forecasts
Emkay Global expects consolidated Ebitda to remain flat at ₹43,700 crore, with the O2C segment showing resilience amid seasonally muted retail demand. They forecast a 4% uptick in O2C Ebitda to ₹15,000 crore, while Retail Ebitda is likely to decline 6% QoQ (but rise 9% YoY). Upstream Ebitda is estimated to drop 8% QoQ to ₹5,100 crore. Emkay also projects a 6% YoY decline in consolidated APAT (Adjusted Profit After Tax) to ₹17,900 crore, citing higher depreciation and interest costs.
Kotak Institutional Equities, on the other hand, expects a modest 3.5% YoY increase in consolidated Ebitda, primarily driven by gains in telecom and retail segments. They foresee an 11% YoY fall in O2C Ebitda, but expect R-Jio’s Ebitda to rise 3.3% QoQ and 17.5% YoY, supported by the telecom tariff hike and a projected ARPU of ₹206.
BNP Paribas Revises Valuation Multiples
In a recent note, BNP Paribas revised its valuation metrics, raising the target multiple for Jio to match Airtel’s. It simultaneously adjusted the multiples for Retail and O2C downward, aligning with industry trends. Additionally, BNP noted that the Indian government’s conversion of Vodafone Idea’s debt into equity could reduce near-term debt risk for Indus Towers, providing a positive outlook.
