MUMBAI:: Reliance Industries Ltd (RIL), India's largest private enterprise, may report a muted fourth-quarter earnings today due to soft refining margins which may be offset by earnings from the retail and telecom arm.

According to a Bloomberg poll of 14 analysts, RIL’s consolidated net profit is estimated to be 9,796 crore. However, 12 analysts estimated RIL's revenue at 1.48 trillion. For the March 2018 quarter, RIL had reported a net profit of 9,435 crore on total revenue of 1.17 trillion at the consolidated level.

"After sixteen straight quarters of q-q standalone profit growth, we expect a relatively muted 4Q. We expect standalone profit after tax to decline 3% quarter-on-quarter driven by further weakness in refining and also a marginal decline in petchem," said Nomura Research in its report dated 9 April.

Also watch: What to expect from Reliance Q4 earnings?

Reliance Industries Ltd (RIL), India's largest private enterprise, may report a muted fourth-quarter earnings today due to soft refining margins which may be offset by earnings from the retail and telecom arm.

According to a Bloomberg poll of 14 analysts, RIL’s consolidated net profit is estimated to be 9,796 crore. However, 12 analysts estimated RIL's revenue at 1.48 trillion. For the March 2018 quarter, RIL had reported a net profit of 9,435 crore on total revenue of 1.17 trillion at the consolidated level.

"After sixteen straight quarters of q-q standalone profit growth, we expect a relatively muted 4Q. We expect standalone profit after tax to decline 3% quarter-on-quarter driven by further weakness in refining and also a marginal decline in petchem," said Nomura Research in its report dated 9 April.

Also watch: What to expect from Reliance Q4 earnings?

Analysts expect RIL's gross refining margin--what a company makes form turning every barrel of crude to fuel-- to be in between $7- $8 per barrel, down from $8.8 per barrel during the last quarter and $11 per barrel in the fourth quarter of the last fiscal. During the quarter, Brent crude averaged 6% quarter-on-quarter lower at a six-quarter low of $63 a barrel in fourth-quarter. Asian refining margins though rose in March, but averaged at a nine-year low of $3.2 per barrel.

"We believe 4Q was among the toughest refining environments for RIL given the sharply lower gasoline cracks, a decline in diesel cracks, and overall the large cuts in heavy crude production which impacted complex refineries negatively. We forecast GRMs at $7.9/bbl for RIL with a premium over the benchmark likely at $4.7/bbl," said JP Morgan in a report dated 7 April.

After eight consecutive quarters of earnings before interest and tax (ebit) growth driven by margin expansion, petchem ebit is expected to decline 2% quarter-on-quarter due to lower margins.

"Petchem is expected to be flattish to slightly weak as lower naphtha prices though strength in paraxylene spreads would be offset by weakness in PTA (purified terephthalic acid) and MEG (mono-ethylene glycol)," said BNP Paribas in an 8 April report.

Shares of Reliance Industries (RIL) climbed as much as 2.24% in the early trade on Thursday, buoyed by reports of the company planning to sell up to 25% stake in its refining and petchem operations to Saudi Arabia's oil company Saudi Aramco.

At 10:45 am, the stock was trading nearly 2.36% higher at 1,377.10 a piece. During the last one year, RIL stock has zoomed 43% whereas the benchmark S&P BSE Sensex has gained 14%.

RIL’s telecom business Jio is expected to report increased profitability quarter-on-quarter, riding on Jio phone sales and subscriber addition. Jio is expected to report around 10% quarter-on-quarter revenue growth with a slight dip in average revenue per user (ARPU) by 1-2% to 128.

In retail, RIL is expected to see a growth in sales and ebit while margins may remain flat. "We expect retail sales to grow 20% and ebit to grow 16% with margins remaining flat at 4.1," said UBS Securities India in a report dated 3 April.

In terms of guidance from the management, the street is expecting updates on the petcoke gasification project against the backdrop of a sharp fall in LNG prices, reduction in debt on deconsolidation of tower and fibre assets and measures to deleverage the balance sheet.

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