Mumbai: Reliance Industries Ltd (RIL) is likely to report a muted first-quarter performance as gains from its telecom and retail arms will be negated by its weak refining and petrochemicals business, according to analysts. RIL will report its first quarterly earnings on Friday. According to a Bloomberg poll of 11 brokers, RIL's consolidated net sales are expected to come in at 1.45 trillion and net profit is estimated at 9,706.20 crore by 13 brokers.

Five leads to watch out for in RIL's first-quarter earnings

1) Stabilising petcoke gasifiers

RIL's petcoke gasifiers remain the key to improve its refining profitability. RIL has invested $5 billion in setting up petcoke gasifiers. With refineries processing heavier crudes, the production of petcoke at refineries is peaking and gasification of petcoke has become an efficient and environmentally safe way of utilizing it. RIL wants to completely eliminate its petcoke production of 6.5 million tonnes a year, generated from two of its cokers. Petcoke gasification will help it produce 23 mscmd (million standard cu. m a day) of synthesis gas or syngas which will reduce intake of regasified liquefied natural gas (R-LNG) at its refineries.

2) Monetization of the telecom assets (tower, fiber)

To cut debt, Jio has decided to transfer its fiber and tower arms to two infrastructure investment trusts (InvITs)—Digital Fiber Infrastructure Trust and Tower Infrastructure Trust—which will be offered to external investors. The transfer will help it not only reduce debt but also become an asset-light digital services company. The InvIT has effectively allowed RIL to replace 710 billion of external debt with very-long-term (20-year) money and thereby remove any refinancing need on this amount of debt. It also gives more balance sheet flexibility and allows RIL to further increase spending across its consumer business if it chooses to do so.

Also read: What to expect from Reliance Jio’s Q1 earnings

3) Commercial roll out of its broadband business

RIL is expected to roll-out its fiber-to-the-home (FTTH) service this year. Reliance Jio had early this month asked its users what they'd like to call it's broadband service. Jio gave the users of its MyJio app three options to choose from JioFiber, JioHome, and Jio GigaFiber. RIL had announced its FTTH service JioGigaFiber plans last year at the company's annual general meeting (AGM). The service aims to deliver wall-to-wall broadband service for mobile devices with speeds peaking 100Mbps in 1,100 cities across India.

4) Omnichannel strategy and launch of an e-commerce platform

Reliance Retail operates neighbourhood stores, supermarkets, hypermarkets, and wholesale, specialty and online stores. For its e-commerce venture, RIL plans to sign on local merchants, boosting their sales through what is known as the O2O (online-to-offline) marketplace, a business model pioneered by the Chinese e-commerce giant Alibaba Group Holding Ltd.

5) Capex plans

RIL has stopped given capital expenditure guidance. However, the analysts expect that any indication towards a slowdown in capex will be viewed positively by most investors.