Motilal Oswal: RIL’s Oil To Chemicals, Retail Businesses Suffer Due To Covid-19 Lockdowns

Motilal Oswal Report

Reliance Industries Ltd.’s Q1 FY21 consolidated/standalone business Ebitda were down 21%/48% YoY due to weak performance in refining and petrochemical businesses, followed by shutdown of Reliance Retail stores due to the lockdown.

Reliance Jio’s revenue was up 11.6% QoQ (8.5% beat) on the back of healthy average revenue per user growth. This could be attributed to the price hike taken in December 2019 along with subscriber addition.

Reliance Retail’s revenue declined 17% YoY due to 50% of its stores being shut and 29% operating partially during the lockdown. However, grocery and the connectivity businesses showed resilience.

During the quarter, Reliance Industries operated refinery and petrochemical units at approximately 90% despite much lower utilization rates of other Indian peers, enjoying the benefits of its integrated Oils-to-Chemicals (O2C) business model.

However, Reliance Industries guidance for the O2C business highlights near-term caution amidst challenges in terms of demand recovery (especially for refining) and the huge supply glut (especially for petrochemical), which are likely to keep margins under pressure.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.