Mukesh Ambani-led Reliance Industries Ltd (RIL) will announce its fiscal fourth quarter earnings report on April 25 (Friday) after its board meeting. According to Goldman Sachs, RIL’s Q4 core EBITDA is expected to remain largely flat sequentially, but market focus into quarterly print will likely be more on (1) retail segment growth trends and (2) residual tariff hike driven growth in Jio revenue. Goldman Sachs estimated retail ex-connectivity revenue to grow by 6.5 per cent YoY in Q4 vs a drop of 8.5 per cent in Q2 and 5.7 per cent reported in Q3. Further, Jio revenue is expected to grow by 4 per cent on-quarter, which is 200 bps faster vs that of Bharti.
“Into the quarterly update, we expect to hear from the company on guidance for retail growth into FY26 and updates to new energy capacity construction/ramp progress (last AGM company guided commencing solar module production by end-CY24 and 30GWh battery production by 2HCY25),” Goldman Sachs said.
RIL’s NAV discount, Goldman Sachs said, has moderately improved but remains wide relative to the historical average amid flattish EBITDA in FY25 and earnings downgrade cycle. “We believe earnings growth will resume in FY26E driven by (1) rebound in retail EBITDA (ex-connectivity) growth to 12 per cent with operations restructuring now largely behind us alongside an improving macro backdrop, (2) acceleration in Jio’s earnings growth to 24 per cent as our telecom team expects another tariff hike in H2CY25, and (3) refining margins will likely improve with c.1.0mb/d global refinery capacity likely to close permanently through CY25E,” it said.
Earlier, in a regulatory filing, RIL had announced that the oil-to-FMCG conglomerate will release its Q4 results on April 25. It will also declare a dividend for shareholders on the same date. “…A meeting of the Board of Directors of the Company is scheduled to be held on Friday, April 25, 2025, inter alia, to: i. consider and approve: a. the standalone and consolidated audited financial results of the Company for the quarter and year ended March 31, 2025; b. raising of funds by way of issuance of listed, secured / unsecured, redeemable non-convertible debentures on private placement basis, in one or more tranches. ii. recommend dividend on equity shares of the Company for the financial year ended March 31, 2025,” RIL said.
Expectations from RIL’s business verticals
Energy: RIL’s energy segment is expected to decline sequentially due to weaker O2C (oil to chemical) earnings. On refining, Goldman Sachs said, a sequential decline is expected in its calculated net GRM to $9.0/bbl in Q4 driven by weaker Singapore refining product cracks and higher crude premiums, suppressing Asia refining margins. “We remain bullish on refining margins over the medium term as nearly 1.0 mn bpd of global refinery capacity is likely to close permanently through CY25E, driving refining utilization rates (and hence refining margins) to go back towards the upper end of historical levels. On petchem, we see a longer recovery trajectory for margins especially for olefins and certain aromatics due to unresolved supply and demand issues,” the brokerage firm said.
Jio: Goldman Sachs expects Q4 revenues of Rs 305 billion (+4 per cent QoQ or 18 per cent YoY vs 16 per cent YoY in Q3) for Jio Infocomm. Excluding fixed/enterprise revenues, it estimated Jio’s wireless revenues to grow 15 per cent YoY. Jio’s reported subscriber base increased by 3.3 million QoQ in Q3FY25, and it is expected that this will accelerate across both wireless and fixed, led by reversal of tariff-hike related churn and strong FWA momentum, respectively. Goldman Sachs forecasted 9 million subscriber adds in Q4. “We forecast a reported ARPU of Rs 209 for March ’25 (Rs 203 in Dec ’24), driven by both residual tariff transmission and mix shift in favor of fixed broadband. We expect Jio’s QoQ revenue growth in Q4 to be 200 bps faster vs. that of Bharti,” it said.
Retail: For the segment, Goldman Sachs forecasted Q4 sales growth (ex-connectivity) of 6.5 per cent YoY. “We note that Q4FY25 sales growth is likely to have a slight drag for all companies because the quarter has one fewer day than Q4FY24. The improving sales growth trend for Reliance Retail is driven by (1) re-structuring of Grocery business largely behind (B2B business rationalization and streamlining of store portfolio through closures of low-profitability stores), and (2) focus in Fashion business on trendier designs and better value proposition (launch of new fast fashion formats like Yousta). We expect a slight improvement in margins sequentially as we view restructuring as largely behind,” the brokerage firm said.
Key monitorables
Goldman Sachs said that key risks to its evaluations include lower-than-expected refining/ chemical margins, lower-than-expected ARPU, lower-than-expected market share and margins in retail business, project delays and higher future capex.
– In terms of key monitorables, investors and market participants will keep an eye on:
Announcement related to IPO plans for Reliance Jio. Planned for 2025, Jio’s listing on the stock exchange, analysts said, is targeting a Rs 40,000 crore IPO with a valuation of around $120 billion.
– Announcement related to IPO plans for Reliance Retail. Investors will be looking forward to commentary on IPO plans for the retail business of RIL, which is scheduled for a later date per a Reuters report.
– Another key monitorable will be announcement of dividend by the conglomerate.
– Market participants will also keep an eye on any commentary on the recently announced Starlink partnership and any color on potential partnership with platforms of OpenAI and Meta to expand AI offerings.
– Investors are also expecting management commentary on impact on Trump tariff on business, if any.
Recap – Q3 Earnings
The oil-to-telecom conglomerate RIL had, in January, announced its Q3FY25 results with profit at Rs 21,804 crore, up 11.88 per cent YoY. The Q3 revenue from operations stood at Rs 243,865 crore, up 6.97 per cent in comparison to Rs 227,970 crore recorded during the third quarter of FY24. Addressing the press, RIL Chairman and Managing Director (CMD) Mukesh Ambani had said, “Robust growth in digital services business was led by sustained subscriber addition and consistent improvement in customer engagement metrics. The retail segment delivered a strong performance, with noteworthy contributions from all formats. The business ably capitalised on the pickup in consumption amid festive demand during the quarter. The O2C (oil-to-chemicals) business showcased its innate resilience, registering growth even in this prolonged period of volatility in the global energy markets.”