Reliance Industries Ltd (RIL), led by Mukesh Ambani, is preparing to announce its first-quarter earnings for the fiscal year 2023-24 on July 21, 2023. The conglomerate’s board of directors will review and approve the standalone consolidated and unaudited financial results during a scheduled meeting.
Anticipated Decline in Revenues and EBITDA
Analysts from BofA Securities anticipate a decline in RIL’s revenues and earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter. The drop is primarily attributed to the oil-to-chemicals (O2C) business, although continued growth in the retail and telecommunications sectors may partially offset this decline.
Projected Figures for Q1 FY 2023-24
BofA Securities projects a 16% decrease in RIL’s bottom line compared to the previous quarter, amounting to approximately Rs 16,160 crore. The brokerage estimates a 1% decline in EBITDA both sequentially and annually. RIL’s consolidated revenue is expected to experience a 7% year-on-year drop and a 4% sequential decline, reaching around Rs 2.08 lakh crore.
Performance of the Oil-to-Chemicals Business
BofA Securities predicts a 6.1% quarter-on-quarter decline in O2C EBIT for the first quarter. This decline is primarily due to weaker gross refining margins (GRMs) in the refinery segment, which offset the benefits of cheaper Russian oil. The brokerage believes that the lack of pricing power, driven by ample supply and insufficient demand, will result in a flat quarter-on-quarter Petchem EBIT.
Stability in Oil & Gas EBIT
On the other hand, BofA Securities expects the Oil & Gas EBIT to remain broadly stable, with a 1.6% quarter-on-quarter increase in revenues.
In conclusion, Reliance Industries’ upcoming first-quarter earnings announcement is expected to reveal a decline in revenues and EBITDA, mainly driven by the performance of the oil-to-chemicals business. However, growth in the retail and telecommunications sectors may partially offset this decline. The figures projected by BofA Securities suggest a challenging quarter for RIL regarding financial performance.