Reliance Industries’ Profit May Fall First Time In Five Quarters
Mukesh Ambani, chairman of Reliance Industries Ltd., attends a lecture in New Delhi. (Photographer: Pankaj Nangia/Bloomberg)  

Reliance Industries’ Profit May Fall First Time In Five Quarters

Mukesh Ambani-owned Reliance Industries Ltd.’s standalone net profit is expected to fall sequentially for the first time in five quarters on lower refining margins.

Profit may decline 0.4 percent to Rs 8,120 crore in the three months ended June over the previous quarter, according to a consensus estimate of five analysts tracked by Bloomberg. The company will announce its results on Thursday.

Reliance Industries’ Profit May Fall First Time In Five Quarters
  • The company is expected to report a 6 percent fall in revenue to Rs 63,085 crore.
  • Earnings before interest, tax and depreciation and amortisation is expected to rise 2 percent to Rs 11,526 crore.
  • The marginal rise in EBITDA is because higher petro-chemical margins will be offset by lower refining margins and a stronger rupee against the dollar.

Gross refining margin, which indicates how much the company earned for converting every barrel of crude into fuel, is expected to fall by 3 percent to $11.2 per barrel over the previous quarter. Petrochemical business is expected to report strong earnings on the back of volume growth as the company had commissioned a new para-xylene plant.

Reliance Jio Infocomm Ltd., the telecom arm of Reliance Industries and one of the major drivers for its stock price, began charging its customers from the first quarter of financial year 2018. It’s unclear if the company will start recognising revenues.

The company said it will stop capitalising when “all the quality of service parameters set by the management are met”. In an interaction after the previous quarter’s earnings, it did not elaborate on the parameters.

Key Factors

  • Updates on Reliance Jio.
  • Joint venture with British Petroleum.
  • Progress on core expansions.
Reliance Industries’ Profit May Fall First Time In Five Quarters

Shares of Reliance Industries have gained more than 40 percent year-to-date, outperforming the 14 percent rise in the S&P BSE Oil & Gas Index. This has also been the best first half for the stock in the last eight years.

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