Reliance Industries’ core business may once again drag down the oil-to-telecom giant’s earnings in the December 2024 quarter, analysts believe. The Mukesh Ambani-promoted company’s earnings are expected to remain either stable or marginally decline at EBITDA levels compared to the same period a year ago.
Seven analysts polled by Bloomberg have estimated the company’s combined revenue to be Rs 2.37 lakh crore. Six analysts expect net adjusted earnings to be Rs 18,940 crore in the third quarter of FY25. RIL operates three core businesses – O2C (which includes refining, fuel retailing and petrochemicals) and two consumer businesses retail and telecom.
Nuvama analysts said in a January 7 report that RIL’s combined EBITDA could improve quarterly due to earnings from Jio (telecom) and retail. However, EBITDA is expected to decline by 1.5 per cent on an annual basis, due to weak performance of O2C. Nuwama expects EBITDA of O2C business to decline by 10 per cent due to weak refining and softness in petrochemicals.
On January 2, analysts at Yes Securities said in a report that EBITDA of RIL’s retail business is expected to reach a record high in the third quarter of FY24, which will benefit from continued expansion and strong consumer demand. Hence, it will contribute to the overall profit.
Analysts at Morgan Stanley also believe the same. They say that we expect Reliance’s income and EBITDA to grow by 4 per cent on a quarterly basis, but it is expected to remain flat on an annual basis as the increase in telecom tariffs and tightness in the global fuel market will impact the profit. According to the report, RIL is rationalizing its retail floor space and the EBITDA of the retail sector may remain flat on an annual basis.
RIL’s consolidated profit in the July-September period fell 4.8 percent year-on-year to Rs 16,563 crore. According to Yes Securities, RIL’s profit after tax may increase marginally by 3 percent compared to the same period a year ago. But Nuvama and Morgan Stanley expect the profit after tax to decline by 4.9 percent year-on-year during this period.