BusinessThursday, October 29, 20261 min read

RIL Q2 Results Preview: Profit outlook brightens as O2C business set to drive growth

By Economic Times Markets · Published by Everything Blog

In short

Major brokerages project Reliance Industries to post a 15% to 17% year-on-year increase in consolidated EBITDA, potentially reaching Rs 52,000 crore. Digital services arm Jio is forecast to add 80 lakh subscribers, lifting its average revenue per user to Rs 219 per month. In contrast, Reliance Retail faces ongoing margin pressure, with EBITDA anticipated to remain flat or contract by up to 1% despite anticipated revenue expansion.

Key points

Higher middle-distillate refining margins and plant utilization are effectively offsettin…: Higher middle-distillate refining margins and plant utilization are effectively offsetting petrochemical and upstream oil weaknesses.
Digital operations continue to expand steadily through higher average revenue per user fo…: Digital operations continue to expand steadily through higher average revenue per user following the unit's public listing.
Retail profitability faces compression as operating margins stagnate despite sustained to…: Retail profitability faces compression as operating margins stagnate despite sustained top-line revenue growth across stores.

Sources checked by our analysis pipeline: 1

The conglomerate will announce its second-quarter results on Friday, October 30, with investors closely tracking the profitability of its refining business, earnings growth at Jio Platforms and margin pressures in Reliance Retail.

Kotak Equities expects consolidated Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) to increase 15% YoY and 11.1% sequentially, supported primarily by a 47% jump in O2C earnings.

Nuvama has projected 17% YoY EBITDA growth, led by stronger-than-expected refining margins. Nomura, meanwhile, estimates consolidated EBITDA at Rs 52,000 crore, supported by improving refinery utilisation and steady telecom earnings.

The results will come just two days after Jio Platforms made its stock market debut following what is described as India’s largest initial public offering, adding another major development for Reliance shareholders.

O2C biz to drive earnings growth

The O2C business is expected to deliver the strongest growth among RIL’s major segments in the September quarter. Kotak expects O2C EBITDA to jump 47% YoY and 29% quarter-on-quarter (QoQ), benefiting from strong earnings at RIL’s special economic zone refinery, favourable currency movements and its US ethane-based petrochemical operations.The brokerage expects the…

AI Analysis

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Positive

In short

Key Points

Higher middle-distillate refining margins and plant utilization are effectively offsettin…: Higher middle-distillate refining margins and plant utilization are effectively offsetting petrochemical and upstream oil weaknesses.
Digital operations continue to expand steadily through higher average revenue per user fo…: Digital operations continue to expand steadily through higher average revenue per user following the unit's public listing.
Retail profitability faces compression as operating margins stagnate despite sustained to…: Retail profitability faces compression as operating margins stagnate despite sustained top-line revenue growth across stores.

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Business

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AI Analysis

Tone

Positive

In short

Key Points

Higher middle-distillate refining margins and plant utilization are effectively offsettin…: Higher middle-distillate refining margins and plant utilization are effectively offsetting petrochemical and upstream oil weaknesses.
Digital operations continue to expand steadily through higher average revenue per user fo…: Digital operations continue to expand steadily through higher average revenue per user following the unit's public listing.
Retail profitability faces compression as operating margins stagnate despite sustained to…: Retail profitability faces compression as operating margins stagnate despite sustained top-line revenue growth across stores.

Topics

Business

Was this summary useful?

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RIL Q2 Results Preview: Profit outlook brightens as O2C business set to drive growth

In short

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