Will it be another $1billion profit quarter for RIL? Five things to watch out for in Q2

NEW DELHI: Reliance Industries, India’s largest company by profit and operator of the world’s biggest refinery at a single location, will announce its second quarter earnings post market hours on Thursday.

The company is expected to report a marginal rise in net profit for the quarter ended September 30, but may report a drop in net sales, according to an ETNow poll.

Here are the top five factors investors should watch out when RIL unveils its numbers for the quarter later today.

Total revenue: RIL is expected to report a 17.4 per cent year-on-year (YoY) drop in total revenue at Rs 62,000 crore compared with Rs 75,117 crore reported for the year-ago period, said the ETNow poll. The oil & gas major reported net revenue of Rs 71,451 crore for the quarter ended June 30.



Net profit: RILer cent year-on-year (YoY) growth in net profit at Rs 7,250 crore ($1 billion) for the quarter ended September 30, according to analysts polled by ETNow. The oil & gas major reported Rs 6,720 crore profit for the corresponding quarter of last financial year.



GRMs: Gross refining margin (GRM) is expected to drop to $10 a barrel for the quarter from $10.6 a barrel in the year-ago period.

The benchmark Singapore GRM – a gauge of Asian refineries–rose 2.8 per cent sequentially to $5.2 a barrel in September quarter, largely due to higher realisation from fuel oil.



EBITDA: Ebitda (earnings before interest, tax, depreciation and amortisation) is likely to come in at Rs 11,000 crore for the quarter ended September 30 against Rs 12,384 crore in the year-ago period. Margins are likely to expand 17.5 per cent for the quarter under review against 16.5 per cent recorded in the year-ago period.

Commentary on Jio: Earlier this month, Reliance Jio announced that the network has created a world record by crossing 16 million subscribers in the first month of operations. Reliance Jio rolled out full 4G services on September 5 and has so far spent $21 billion on this business with network rollout largely complete.

Morgan Stanley says it expects Jio 4G telecom services to grow to 40 million subscribers next financial year and add $2 billion in revenues, with a positive cash flow by 2019-20.