Shares of Reliance Industries (RIL) will be closely watched today as the company prepares to announce its quarterly results for the July-September 2024 period later in the evening. The stock has recently faced pressure, dropping over 6% in the past month, weighed down by weak global cues and foreign outflows impacting heavyweight stocks.
Muted Earnings Expected By RIL for Q2
RIL is expected to report subdued earnings for the second quarter, primarily due to weakness in its Oil-to-Chemicals (O2C) segment. According to an average estimate from six brokerages, the company’s net profit for the quarter is projected to decline by as much as 10% year-on-year.
Net sales are forecasted to decrease by a marginal 0.6% year-on-year. The company’s consolidated EBITDA is anticipated to fall by 7%, largely due to a poor performance in the O2C business.
Previous Quarter Performance
In the previous quarter, RIL reported a 5% decline in consolidated net profit to Rs 15,138 crore, while revenues fell 12% year-on-year to Rs 2.36 lakh crore. Analysts will be watching to see if the company can recover from these trends in its Q2FY25 results.
Stock Performance in Last One Year
The shares of Reliance Industries have demonstrated mixed returns across various time intervals. In the last month, the stock delivered a negative return of 6.93%. Over the past six months, it exhibited a significant decline, with negative returns of 6.13%, indicating a strong downtrend.
Conversely, year-to-date, Reliance Industries shares have surged by 6.56%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 17.24%.
Jio Platforms to Report Strong Performance
Jio Platforms is expected to have a healthy quarter, driven by tariff hikes, customer upgrades, and the benefit of one additional day during the quarter. These factors are likely to contribute to strong results from the telecom arm of the conglomerate.
O2C Business Hit by Weak Refining
Analysts expect EBITDA from RIL’s O2C segment to drop by up to 27% year-on-year and 10% quarter-on-quarter, driven by weakness in the refining and petrochemical segments. This downturn is likely to be a key factor in the company’s overall subdued performance in the second quarter.
Consumer and ONG Segments to Offset O2C Weakness
Despite the challenges in the O2C segment, strong performances in RIL’s consumer and oil and gas (ONG) businesses are expected to help offset the impact. The retail segment is expected to benefit from higher footfalls, although some earnings impact may result from store rationalization and heavy monsoons. The segment’s EBITDA is projected to grow by up to 6% year-on-year.
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