Mumbai: Reliance Industries Ltd (RIL) reports its December quarter earnings later on Friday. RIL is largely expected to report a decent set of numbers as lower refining margins will be offset by an increase in petchem volumes. The most watched out telecom business, Jio, may also report a profit. All eyes are on the progress and roadmap of Jio business
Reliance Jio profits: Reliance Jio Infocomm Ltd is likely to report a profit when it announces results for the December quarter, on the back of a sharp cut in interconnection usage charges (IUC), increasing subscriber count and stability in pricing, said analysts. The street will primarily watch out for Jio’s revenue, pricing strategy and capex plan in upcoming results.
Gross refining margins: RIL’s gross refining margins (GRMs) may decline sequentially or stay flat, in line with Singapore complex refining margins. Nomura expects Reliance’s GRM to moderate from very strong $12 per barrel to $11.5 per barrel.
Better petchem volumes: Goldman Sachs expects RIL’s earnings growth to be driven primarily by the petchem division on improving throughput and lower opex as new capacities reach higher utilization rates, while margins may stay resilient despite higher oil prices due to the diversified feed mix. In a note on 15 January, Goldman Sachs said that petchem margins have been resilient despite rising oil prices and it expects petchem margins to remain flattish for RIL in the December quarter.
Path ahead after buying Reliance Communications’ assets: In December, Reliance Jio said it will buy a majority of the wireless assets of Reliance Communications Ltd (RCom). Jio has emerged as the highest bidder and has signed binding agreements with Mukesh Ambani’s younger brother Anil Ambani-run RCom for sale of wireless spectrum, tower, optical fibre network and media convergence node assets. Investors will watch out for details and plan ahead of this acquisition.