Reliance Industries Q4 Earnings Preview:
Retail and Digital Segments Expected to Offset Oil-to-Chemicals Weakness
Reliance Industries Ltd (RIL) is scheduled to announce its fourth-quarter results for the fiscal year 2024-25 on April 25. According to a consensus estimate by eight analysts, the company is expected to post consolidated revenue of ₹2.38 lakh crore, marginally higher than the ₹2.37 lakh crore reported in the same period last year. Despite a tepid top-line growth, the company’s EBITDA is projected to rise to ₹43,491.6 crore from ₹42,516 crore, while net profit is estimated at ₹18,820 crore, nearly flat compared to ₹18,951 crore a year ago. The results are anticipated to reflect a mixed performance, with continued strength in telecom and retail being counterbalanced by challenges in the oil-to-chemicals (O2C) and oil & gas businesses.
Highlights:
Revenue estimated at ₹2.38 lakh crore, nearly flat YoY.
EBITDA seen at ₹43,491.6 crore, up from ₹42,516 crore.
Net profit forecast at ₹18,820 crore versus ₹18,951 crore last year.
O2C Earnings to Remain Subdued Amid Margin Compression and Weak Product Cracks
Reliance’s O2C segment, a major contributor to its overall profitability, is expected to report a 14 percent year-on-year decline in EBITDA, with sequential performance likely to remain flat. The segment has been hit by a combination of higher feedstock costs and global softness in petrochemical and refining margins. Ethane prices surged 28 percent from the December quarter, while naphtha costs held steady, compressing margins in key product lines. Additionally, benchmark Singapore gross refining margins (GRMs) have plummeted 58 percent year-on-year, reflecting weak product cracks across global markets. However, RIL’s continued reliance on discounted crude from Russia (34 percent), Iraq (18 percent), and Venezuela (6 percent) is expected to provide partial cushion to GRMs despite adverse macro trends.
Highlights:
O2C EBITDA expected to fall 14% YoY due to weaker product cracks.
Ethane prices up 28%, impacting feedstock cost.
Discounted crude imports help support overall GRMs.
Oil & Gas Segment to See Pressure Due to Lower KG-D6 Output Despite Higher Prices
The oil & gas segment is also expected to witness subdued performance, with EBITDA likely to decline 9 percent year-on-year and 8 percent quarter-on-quarter. This is primarily due to lower production from the KG-D6 basin, which continues to face operational challenges. Although deepwater gas prices have increased by 2 percent on a yearly basis, the volume-driven pressure is likely to offset any benefits from pricing. This trend highlights a structural issue in Reliance’s upstream portfolio, where incremental earnings remain constrained by flat or falling production metrics.
Highlights:
EBITDA projected to decline 9% YoY and 8% QoQ.
KG-D6 output remains weak despite 2% rise in gas prices.
Volume pressures outweigh minor pricing gains.
Jio’s Digital Services Segment to Deliver Steady Gains Driven by Higher Tariffs
In contrast, the digital services arm, led by Reliance Jio, is expected to be one of the stronger contributors in the quarter. Jio’s EBITDA is forecast to rise 16 percent on a year-on-year basis and 2 percent sequentially. The performance will be underpinned by higher average revenue per user (ARPU), which is estimated to be up 13 percent year-on-year and 1 percent quarter-on-quarter following tariff hikes. A modest increase in subscriber base will also aid topline and bottom-line expansion, reinforcing the positive impact of pricing power in India’s telecom landscape.
Highlights:
Jio EBITDA seen up 16% YoY and 2% QoQ.
ARPU growth of 13% YoY supports earnings.
Marginal increase in subscriber base adds to revenue base.
Retail Business to Show Strong Yearly Growth Despite Sequential Dip
The retail segment is expected to show a healthy 11 percent year-on-year EBITDA growth, supported by an expansion in store count, improved realisations, and better cost efficiencies. However, on a sequential basis, EBITDA may fall by 9 percent due to the end of festive season-related spending and a shorter operating quarter. The continued build-out of offline and digital retail infrastructure is likely to sustain long-term growth in the segment, making it a critical earnings driver amid volatility in commodity-linked businesses.
Highlights:
Retail EBITDA growth expected at 11% YoY.
Sequential dip of 9% due to post-festive season slowdown.
Growth aided by larger store network and better margins.
Investor Focus: IPO Plans, Energy Transition, and Crude Sourcing Strategy
Investors are expected to closely track management commentary on several strategic fronts. Among them are Reliance’s IPO plans, with Jio targeted for a listing in 2025 and retail shortly thereafter. Updates related to discounted crude sourcing, the ongoing 5G rollout, new energy initiatives, and exploration efforts in the KG-D6 block will also be key areas of interest. Given the shifting demand landscape and macro headwinds, investor sentiment will hinge on the clarity provided around margin sustainability, capital allocation, and roadmap for unlocking shareholder value through business demergers and public listings.
Highlights:
Jio IPO targeted for 2025, retail listing may follow.
Updates on discounted crude strategy and 5G rollout awaited.
Investors keen on progress in energy transition and KG-D6 developments.
