Brokerages expect Reliance Industries (RIL) to report record Ebitda in Q1, driven by growth across all its business segments. Goldman Sachs expects RIL’s Q1 Ebitda to grow 15% year-on-year — the highest in six quarters — driven by strong performance in refining, telecom and retail segments.
“We expect Q2 Ebitda growth to accelerate to 20% growth YoY on further strength in refining (lack of plant maintenance, lower crude premiums with increasing OPEC+ supply and strong diesel cracks),” it said.
Goldman Sachs believes that ahead of the Q1 results, market focus will be on two key segments: retail, where it expects Ebitda growth to accelerate further from 9%/15% YoY in Q3/Q4FY25 to 19% in Q1FY26, driven by continued emphasis on quick commerce; and oil-to-chemicals (O2C), where it sees 16% YoY growth supported by strong refining margins.
“Meanwhile, strength in telecom earnings is broadly well expected on subscriber adds and further ARPU expansion QoQ,” it said.
Morgan Stanley said RIL’s Q1 earnings should show a rise in O2C earnings with very strong global fuel margins partly cushioned by refinery maintenance, as well as retail revenue growth of ~17% YoY with stable QoQ margins.
Telecom should show ~6.5million subscriber net adds QoQ with a slight increase in ARPU, it said.
“Overall consolidated Ebitda should rise 16% YoY, and consolidated earnings should rise 27%. Sequential earnings should remain flattish as improvement in energy and retail outlook is negated by higher depreciation and interest cost expensed from 5G monetisation,” it said
CLSA said Reliance Industries is entering an exciting phase, starting with its Q1FY26 results, where it expects to see notable improvements in key performance indicators across major business segments.
“This comes after a year-long lull underscored by a weak retail performance due to its operational streamlining and consolidation in telecom subscribers,” Morgan Stanley said. The international brokerage expects retail to resume its high-teens earnings before interest, taxes, depreciation, and amortisation (Ebitda) growth, and Jio may add nearly 9-10mllion subscribers during the quarter versus over 6 million in full-year FY25.
“Reliance’s AGM in August or September should be an important event which may hold hints for an upcoming Jio IPO, as well as announcements on scaling up in quick commerce, FMCG and new energy,” it said.
Kotak Institutional Equities expects consolidated Ebitda to rise 15.4% yoy (up 2.1% qoq) with 19-20% yoy EBITDA increase for O2C, digital and retail segments, partly offset by oil & gas (down 7.5% you).
Despite the refinery shutdown in 1Q, O2C Ebitda will rise 3.5% qoq (19% yoy on low base) on better margins, it said.
With tail benefits of July 2024 tariff hike and better transmission to margins, Kotak “expect R-Jio’s Ebitda to rise 4.2% qoq (18.6% yoy). “We assume blended ARPU of Rs209.5 (1.6% qoq, ~15% yoy). We forecast retail Ebitda to grow ~21% yoy (up 1.1% qoq) on a low base,” it said.
