RIL shares dip ahead of Q4; key things to watch out for

Shares of Mukesh Ambani-led Reliance Industries (RIL) edged higher in Friday's trade at ₹2353.90 versus the previous day close of ₹2345, but could not sustain the gains and soon turned in the red.

The scrip was trading at ₹2,338.20 a piece, down 0.33 per cent at the time of writing the report. The stock has gained 3.16 per cent in the last one month, while on a year-to-date basis RIL shares fell 9.09 per cent.

The stock hit a 52-week high of ₹2,855 on 29 April, 2022 and 52-week low of ₹2,180 on 20 March, 2023.

Ahead of Q4 results, RIL shares had an average target price of ₹2,891, according to data from Trendlyne, which suggested a 23 per cent upside potential from the current levels.

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The oil-to-telecom major will announce its March quarter (Q4FY23) earnings post market hours today where the conglomerate is expected to log a flattish profit.

Muted growth in topline, bottomline

The growth in Reliance Industries' topline and bottomline in the fourth quarter is expected to be muted, but analysts foresee a strong double-digit growth in the operating profit.

Consolidated revenue for the quarter is seen rising a mere 1.2 per cent year-on-year (YoY) to ₹2.14 lakh crore, according to the average of estimates given by seven brokerages.

Brokerage Kotak Institutional Equities expects Reliance to see 1.3 per cent YoY rise in net profit at ₹16,455 crore. Revenue for the oil-to-telecom conglomerate may rise 9.4 per cent to ₹2,26,872 crore.

HDFC Securities expects Reliance to report EBITDA of ₹378 billion (over 20.4 per cent YoY and over 7.1 per cent QoQ), supported by a steady performance from the retail and telecom segments.

O2C EBITDA/tonne of crude processed is estimated to increase by 4 per cent QoQ, owing to an improvement in petroleum product cracks and an improvement in petchem margins QoQ. We expect EBITDA to increase by 14 per cent YoY to ₹42.1 billion from its retail segment. We have estimated 5mn subscriber addition and ARPU of ₹179 in Q4.

Nuvama sees RIL profit at ₹16,464 crore, up 1.6 per cent YoY. It expects sales falling 3.3 per cent to ₹2,00,454 crore.

Reliance Jio is expected to put up a decent show in the March quarter on the back of steady rise in subscriber additions and growth in ARPU.